0f  tl|^ 


Lewis-League   Publishing  Company 


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This  Book  Will  Be  Of  Special      '^ 
nterest    1  o 

Friends  of  President  Roosevelt, 

Friends  of  Senator  La  Follett, 

Friends  of  Colonel  Bryan, 

Friends  of  Mayor  Tom.  L.  Johnson, 

Friends  of  Hon.  Thomas  E.  Watson, 

The  Illinois  Manufacturers'  Association, 

The  Inter-State  Commerce  Commission, 

The  Board  of  Railroad  Commissioners  in  every  State, 
£  Single  Taxers, 

Stockholders  in  the  Pennsylvania  Railroad, 

Stockholders  of  the  New  York  Central  Railroad, 

Stockholders  of  the  Standard  Oil  Company, 

Stockholders  of  the  United  States  Steel  Corporation, 

Stockholders  of  Swift  &  Company, 

Stockholders  of  Armour  &  Company, 

Stockholders   of   all   National   Banks, 

All  people  engaged  in  mining  gold  or  silver. 

All  wholesale  and  retail  liquor  dealers. 

Friends  and  relatives  of  140  Senators  and  Repre- 
sentatives, 

The  Continuous  Prosperity  League  of  the  United 
States, 

The  Land  Currency  League  of  the  United  States, 

The  American  Society  of  Equity  of  North  America. 


Questions  analogous  to  the  subject-matter  of 
this  book  will  be  discussed  on  the  hustings  by  orators 
of  not  less  than  six  different  political  parties  during 
the  summer  and  fall. 


The  Curse  of  the  Giants. 


Enormous  Profits  of  the  Steel  Trust,  the 
Meat  Trust,  the  Railroads  and  the 
Banks,  Reduced  to  Compre- 
hensible Figures. 


A  Dearth  of  United  States  Money  While  the 
Debts  Increase  by  the  Billions. 


Railw8.y  Freight  Rates  and  Railway  Passen- 
ger Rates  Compared. 


Reported  Income  and  Reported  Expenses  of 

the  Pennsylvania  Railroad  and  the  New 

York    Central    and    Hudson    River 

Railroad  Analyzed  With  Most 

Astonishing  Results. 


Millions  and  Millions  of  Extortionate  Profits 

Make  Billions  and  Billions 

of  Public  Debts. 


The  Solution  of  the  Saloon  Problem  in  Few 
Words. 


Life    Insurance    Figures    Com.pared    With 
United  States   Coinage. 


Copyrighted,  1908 

by  the 

Lewis-League  Publishing  Company 


CONTENTS. 

PAGE 

Chapter  I. — In  Bondage  7 

Chapter  II. — Millions    and    Millions    of 

Profits    11 

Chapter  III.— Long    Time    Credits— 100 

years;   150  years;   475  years  and  500 

years    20 

Chapter  IV. — Profits  Hidden  as  Expenses  27 
Chapter  V. — Public  Eeports  Intentionally 

Incorrect  38 

Chapter  VI.— Get-Rich-Quick  Profits  ...  43 
Chapter  VII. — United  States   Money  vs. 

Bank  Notes 54 

Chapter  VIII. — Conclusion    69 

Political  Reminiscences 72 

Appendix  A  95 

Appendix  B  114 


To  the  millions  and  millions  of 
American  Boys  and  Girls,  born  to 
such  conditions  of  weal  or  woe  as 
may  he  or  have  been  bequeathed  to 
them  by  their  progenitors,  this  Book 
is  Dedicated. 


INTRODUCTORY. 


*^Come  let  us  reason  together."  It  is  the 
purpose  of  the  Railway  Association  to  in- 
crease their  income  by  advancing  freight 
rates  to  the  amount  of  100  million  to  200 
million  dollars  per  year.  That  is  equivalent 
to  increasing  the  public  debts  from  two 
and  one-half  to  five  billions  of  dollars.  The 
alternative  is  a  general  reduction  of  wages; 
a  widening  of  the  breach  between  capital  and 
labor,  and  consequently  a  general  disturbance 
in  every  branch  of  trade  and  commerce. 

Is  such  a  course  necessary  or  wise? 

At  the  minimum  charge  for  moving  freight 
(2.95  mills  per  ton  per  mile),  a  single  train 
hauling  1,500  tons  of  freight  from  Milwau- 
kee to  New  York,  will  ''earn"  $4,710.  After 
paying  wages  of  train  crew,  cost  of  fuel, 
wear  and  tear  of  cars  and  all  other  trip  ex- 
penses, there  still  remains  a  margin  of  profit 
sufficient  to  pay  interest  for  an  entire  year 
on  one  hundred  thousand  dollars  of  four  per 
cent  railway  bonds.    Namely,  $4,000. 

An  intelligent  inquiry  into  the  subject  will 
develop  the  fact  that  railway  freight  rates 
and  railway  passenger  rates  should  be  re- 
duced, not  increased. 


The  Curse  of  the  Giants, 


CHAPTER  I. 

IN    BONDAGE. 

Considering  that  vice,  crime  and  general 
depravity  in  high  j^laces  appear  to  be  on  the 
increase,  do  the  signs  of  the  times  indicate 
that  conditions  and  human  environment  will 
grow  better  or  worse  during  the  next  twenty- 
five  years? 

Notwithstanding  much  that  seems  to  war- 
rant a  different  conclusion,  an  intelligent 
comprehension  of  the  forces  for  good  and 
evil  justify  the  expectation  that  conditions 
infinitely  more  just,  more  equitable,  and 
generally  harmonious,  will  prevail  a  quar- 
ter of  a  century  hence.  MEANTIME 
MUCH  WILL  BE  GAINED  BY  A  FULL 
REALIZATION  OF  CONDITIONS  AS 
THEY  ARE. 

What  is  the  one  public  question  in  which 
all  classes  and  conditions  of  people  have  a 
personal  and  direct  concern? 


8  THE  CURSE  OF  THE  GIANTS 

The  question  of  money  and  debt,  involv- 
ing as  it  necessarily  does  the  subject  of 
taxes,  interest,  rent  and  profit. 

Is  the  volume  of  money  in  circulation  too 
large  or  too  small  for  legitimate  purposes, 
that  is  to  say  for  the  convenience  of  the 
people  as  a  medium  of  exchange? 

Never  in  all  the  history  of  the  Govern- 
ment of  the  United  States  has  there  been 
a  sufficient  supply  of  the  medium  of  ex- 
change in  circulation.  (More  on  this  point 
further  on.) 

Define  public  debts. 

All  bonds,  national,  state,  municipal  or 
corporate,  and  all  certificates  of  indebted- 
ness on  which  the  public  are  required  to 
pay  interest  or  dividends,  are  public  debts. 
To  all  intents  and  purposes  the  capital 
stock  of  railways  and  other  corporations 
are  public  debts  as  absolutely  as  are 
Government  bonds.  (More  on  this  point 
further  on.) 

What  is  the  sum  total  of  the  public  in- 
debtedness? 

Not  less  than  eighty  thousand  millions 
of  dollars.  How  much  more  no  man 
knoweth  or  can  know.  (More  on  this  point 
further  on.) 


THE  CURSE  OF  THE  GIANTS  9 

How  mucli  does  this  indebtedness  cost  the 
people  annually? 

At  five  per  cent,  four  billions  of  dollars ; 
a  sum  larger  by  hundreds  of  millions  of 
dollars  than  the  aggregate  coin  value  of 
all  the  gold,  silver  and  copper  coined  at 
all  the  mints  of  the  United  States  since  the 
mints  were  established  at  the  close  of  the 
eighteenth  century,  1792 ;  a  sum  more  than 
one  billion  dollars  greater  than  the  bonded 
debt  of  the  United  States  at  the  close  of 
the  war  of  the  rebellion. 

Are  the  public  debts  gradually  being  paid 
off,  year  by  year? 

No.  On  the  contrary  the  public  debts 
increase  in  volume  rapidly,  steadily  and 
relentlessly  with  each  recurring  year. 

Are  there  no  statutory  or  constitutional 
enactments  by  virtue  of  which  the  public 
debts  can  be  confined  within  limits? 

Human  laws  will  not  limit  or  prevent  the 
inevitable  increase  of  the  public  debts. 
They  are  destined  to  increase  unto  the  end 
of  the  age.  A  limitation  of  public  debts  is 
quite  generally  written  in  state  constitu- 
tions it  is  true;  but  such  limitations  are 
wholly  inoperative.  For  instance,  the  con- 
stitution of  the  State  of  New  York  (adopted 
1894),  decreed  that  the  statutory  laws  of 


10  THE  CURSE  0^  THE  GIANTS 

that  commonwealth  should  not  permit  the 
authorization  of  the  state  debt  to  exceed 
a  certain  fixed  limit.  The  state  debt  very 
soon  outgrew  the  limitations  of  the  con- 
stitution and  consequently  the  creditor 
classes,  the  bondholders,  proposed  an 
amendment  to  the  organic  law,  which 
amendment  was  obligingly  ratified  by  the 
people  at  the  general  election  November, 
1905.  Even  before  the  proposed  amend- 
ment was  submitted  to  the  people,  how- 
ever, the  legislature  had  authorized  an  in- 
crease of  the  state  debt  for  a  single  item 
(the  improvement  of  highways),  on  which 
debt  the  minimum  of  interest  will  exceed 
two  hundred  and  twenty-six  millions  of 
dollars.  (See  Assemblv  Document,  num- 
ber 37,  N.  Y.,  1906.) 

Assuming  (if  such  assumption  is  con- 
sidered rational),  that  conditions  relating  to 
business,  commerce,  politics  and  finances  will 
continue  the  next  ten  years  as  tranquil  as 
during  the  last  decade,  about  what  will  be  the 
aggregate  of  the  public  debts  at  the  expira- 
tion of  that  period? 

Not  less  than  one  hundred  and  thirty-one 
billion,  ninety-four  million,  five  hundred 
and  sixty-eight  thousand  and  three  hundred 
and  forty-three  dollars. 

How  is  that  conclusion  reached? 


THE  CURSE  OF  THE  GIANTS  U 

Very  simply.  It  is  the  present  minimum 
of  indebtedness  as  above  stated,  plus  in- 
terest and  dividends  compounded  semi-an- 
nually at  5%.  Any  bright  school  boy  or 
girl  can  readily  make  the  computation. 


CHAPTER  II. 

MILLIONS  OF  PROFIT. 

"What  are  the  profits  of  Swift  &  Company, 
the  great  Chicago  meat  packers? 

Probably  more  than  two  hundred  thou- 
sand dollars  every  day  that  the  sun  rises 
and  sets.  There  are  no  accurate  and  reli- 
able sources  of  information  accessible  to 
the  public  however  which  indicate  the 
actual  figures. 

In  the  absence  of  specific  data  how  is  it 
estimated  that  the  profits  of  Swift  &  Com- 
pany are  so  large? 

In  the  absence  of  specific  data,  any  esti- 
mate would  be  mere  guess  work  of  course, 
yet  nevertheless,  an  estimate  will  at  least 
help  to  form  a  more  intelligent  opinion  of 
the  enormous  profits  which  this  one  arm 
of  the  giant  meat  trust  are  accumulating 
every  day  in  the  year  from  the  dire  neces- 
sities of  the  people  without  loss  of  time  for 
Sundays  and  holidays.    Swift  &  Company 


12  THE  CURSE  OF  THE  GIANTS 

employ  a  great  many  men,  women  and 
children.  How  many  is  not  known  to  the 
author  of  this  work.  Many  of  them  are 
paid  15  cents  an  hour,  and  some  less.  Esti- 
mate the  wages  paid  to  each  man, 
woman  and  child  during  the  year  at  $1,000 
and  the  number  continuously  employed  the 
year  round  at  sixteen  thousand.  Estimate 
the  amount  necessary  to  keep  the  plant  in 
repair  at  one  million  dollars  for  the  year. 
All  other  expenses  we  will  estimate  at  $30,- 
000  for  each  one  of  the  365  days  in  the 
year.  If  the  total  yearly  expenses  are  not 
more  than  the  above  estimate;  indeed  IF 
THEY  ARE  NOT  MORE  THAN 
DOUBLE  THIS  ESTIMATE,  yet  a  few 
millions  more  mav  be  added,  and  if  their 
annual  sales  ARE  NOT  LESS  than  they 
boasted  they  were  some  ten  years  ago,  then 
there  remains  a  margin  exceeding  $315,000 
for  every  day  in  the  year  to  be  distributed 
as  interest  on  bonds  and  dividends  on 
stock,  while  the  weekly  profits  approxi- 
mate two  and  a  quarter  millions  of  dol- 
lars. Any  bright  ten  year  old  school  child 
can  verify  the  calculation.  Some  years 
ago  Swift  &  Company  publicly  advertised 
that  their  annual  sales  were  $175,000,000. 
It  is  presumed  that  their  sales  are  greater 
at  present.  They  purchase  live  stock  at 
the  lowest  market  rates.  The  hair,  hide, 
horn's,  hoofs,  blood,  bones  and  meat  are  all 


THE  CURSE  OF  THE  GIANTS  13 

utilized  and  converted  into  merchantable 
products.  Ordinarily  well  equipped  manu- 
facturers without  the  gTeat  modern  facil- 
ities for  economic  production  and  the  sav- 
ing of  waste  enjoyed  by  Swift  &  Company 
frequently  make  from  75  to  100  per  cent 
profit. 

Engaged  in  any  legitimate  business  or  hon- 
orable industrj^,  how  many  years  is  required 
for  a  farmer,  a  merchant,  mechanic  or  pro- 
fessional man  to  accumulate  one  million  dol- 
lars over  and  above  necessary  expenses? 

If  he  accumulates  at  the  rate  of  $20,000 
a  year  fifty  years ;  if  $50,000  a  year  twenty 
years. 

Granting  that  the  profits  of  Swift  &  Com- 
pany may  exceed  a  quarter  of  a  million  daily, 
considering  the  indisputable  fact  that  the 
business  is  honorable  and  the  profits  legiti- 
mate, how  do  the  people  of  the  commonwealth 
suffer  as  a  consec[uence? 

In  the  simple  fact  that  under  present 
financial  conditions  the  enormous  profit 
must  necessarily  be  converted  into  inter- 
est bearing  securities ;  public  debts.  Com- 
petition has  been  destroyed  and  consequent- 
ly the  inevitable  trend  of  society  toward  a 
condition  of  bondholders  and  bond-serv- 
ants is  thus  accelerated. 


14  THE  CURSE  OF  THE  GIANTS 

Illustate  further  how  corporate  profits  are 
converted  into  public  debts. 

The  aggregate  yearly  profits  of  six  cor- 
porations, namely,  the  Pennsylvania  Rail- 
road Company,  the  New  York  Central  and 
Hudson  Eiver  Eailroad  Company,  the 
United  States  Steel  Corporation,  The 
Standard  Oil  Company,  Armour  &  Com- 
pany and  Swift  &  Company  approximate 
five  hundred  millions  of  dollars.  These 
profits  are  the  daily  aggregate  collections 
of  the  circulating  medium  or  medium  of 
exchange.  In  order  to  cli'aw  interest  and 
dividends  this  aggregation,  perhaps  a  bil- 
lion dollars  in  the  short  space  of  two  years, 
must  be  converted  into  certificates  of  in- 
debtedness, namely,  stocks,  bands  and 
mortgages. 

"What  are  the  profits  of  the  Standard  Oil 
Company  ? 

One  hundred  and  fourteen  thousand, 
two  hundred  and  sixty-six  dollars  and 
thirty-three  cents  daily,  Sundays  and  holi- 
days included.  In  other  words,  the  profits 
divided  among  the  stockholders  of  the 
Standard  Oil  Company  for  the  seven  years 
beginning  with  1900,  and  ending  with  1906, 
were  $292,064,751,  being  297  per  centum 
of  the  capital  stock  of  the  Company  which 
is  (or  was),  $98,338,300.  The  average  an- 
nual dividends  were  42.42  per  centum  of 


THE  CURSE  OF  THE  GIANTS  16 

tlie  capital.  Every  sixty  seconds  of  time, 
night  and  day,  which  came  and  went  dur- 
ing the  years  above  specified,  the  profits 
averaged  seventy-nine  dollars  thirty-five 
cents  and  two  mills.  Counting  business 
days  only,  and  allowing  ten  hours  as  a  busi- 
ness day,  and  three  hundred  business  days 
to  the  year,  the  average  profit  divided 
among  the  stockliolders  of  the  Standard 
Oil  Company  is  231  dollars  seventy-nine 
and  two-third  cents  a  minute. 

What  were  the  profits  of  the  Pennsylvania 
Railroad  Company  for  1906? 

Approximately  three  hundred  thousand 
dollars  a  day.  Exactly  $299,699.26  per  day, 
Sundays  and  holidays  included,  according 
to  semi-public  official  reports.  Multiply 
this  sum  by  365,  and  you  have  the  amount 
of  the  profits  for  the  year,  namely,  $109,- 
390,232.82. 

What  were  the  profits  of  the  United  States 
Steel  Corporation  for  1906? 

Four  hundred  and  twenty-nine  thousand, 
ninety-three  dollars  and  forty-five  cents  a 
day.  By  multiplying  these  figures  by  365 
the  profits  for  the  year  are  exhibited,  name- 
ly $156,619,111. 

What  were  the  profits  of  the  United  States 
Steel  Corporation  for  the  three  months  end- 
ing June  30,  1907? 


16  THE  CURSE  OF  THE  GIANTS 

More  tlian  half  a  million  dollars  each 
day.  To  be  exact,  $500,040.71.  Multiplied 
by  91,  the  number  of  days  in  the  quarter, 
we  find  the  total  amount  of  profit  to  be 
$45,503,704.61. 

What  were  the  profits  of  the  United  States 
Steel  Corporation  for  the    quarter    ending 
September  30,  1907? 
$45,804,285. 
How    much    of    the    circulating    medium 
(cash)  does  the  United  States  Steel  Corpo- 
ration admit  as  having  on  hand  just  prior  to 
the  panic  of  1907,  which  panic  is  said  to  be 
the  result  of  ''a  monetary  stringency"? 
On  October  1,  1907,  the  United  States 
Steel  Corporation  admits  that  it  had  on 
hand  ''cash  in  bank"   nearly    seventy-six 
million  dollars   ($75,973,000.00). 

Are  bonds  issued  by  railroad  corporations 

public  debts? 

Certainly.  In  the  most  absolute,  prac- 
tical and  baneful  sense  of  the  term. 

Can  that  assertion  be  demonstrated  in  a 
single  instance? 

It  is  demonstrated  in  the  financial  his- 
tory of  all  railroad  corporations.  For  in- 
stance, the  New  York  Central  and  Hudson 
River  Railroad   Company  was   organized 


THE  CUKSE  OF  THE  GIANTS  17 

November  1,  1869.  In  addition  to  its  cap- 
ital stock,  the  corporation  started  out  with 
a  "bonded  debt"  of  less  than  fourteen 
million  dollars.  During  the  next  succeed- 
ing thirty  years  the  cash  profits  divided 
among  the  stockholders  averaged  more 
than  sixteen  thousand  dollars  for  every  day 
on  which  the  sun  rose  and  set,  every 
period  of  24  hours,  aggregating  more  than 
175  millions  of  dollars.  The  profits  divid- 
ed among  the  stockholders  the  first  thirty 
months  were  more  than  sufficient  to  pay 
off  the  entire  original  ''bonded  debt,"  so 
called. 

During  this  period  of  thirty  years  when 
175  millions  were  distributed  among  the 
stockholders  was  the  bonded  debt  of  less 
than  fourteen  millions,  or  any  portion  there- 
of, paid  off! 

No.  On  the  contrary,  the  debt  was  in- 
creased as  the  profits  increased,  so  that 
during  the  same  period  that  the  stock- 
holders pocketed  175  millions  of  dividends 
they  issued  about  86  millions  more  bonds 
and  called  their  ''bonded  debt"  at  the  be- 
ginning of  the  twentieth  century  100  mil- 
lions. 

Then,  from  the  stockholders'  viewpoint, 
the  bonds  of  this  particular  corporation,  the 
New  York  Central  and  Hudson  Eiver  Eail- 


18  THE  CURSE  OF  THE  GIANTS 

road,  tlie  bonds  of  tlie  Company  are  assets 
rather  than  liabilities? 

Precisely  so.  Generally  speaking,  the 
stockholders  are  the  bondholders,  and  the 
bondholders  are  the  stockholders,  and  the 
public,  the  people,  are  taxed  by  excessive 
rates  of  freight  and  fare  sufficient  to  pay 
the  dividends  on  the  stocks  and  the  interest 
on  the  bonds  at  the  same  time. 

This  is  the  explanation,  then,  why  the  so- 
called  "bonded  indebtedness"  continues  to 
increase,  always  keeping  pace  with  the 
profits,  be  the  profits  never  so  great? 

That  is  the  explanation.  It  is  manifest 
that  if  the  stockholders  were  paying  inter- 
est on  bonds  out  of  their  own  pockets  and 
into  the  pockets  of  other  people,  they 
would  clear  of¥  the  debts  and  save  the  in- 
terest money. 

Has  the  so-called  "bonded  debt"  of  the 
New  York  Central  and  Hudson  l^iver  Rail- 
road Company  been  further  increased  dur- 
ing the  opening  years  of  the  twentieth  cen- 
tury? 

Yes.  In  their  public  statement  for  the 
fiscal  year  ending  June  30,  1905,  the  total 
"bonded  debt"  is  stated  to  be  230  million, 
414  thousand  and  845  dollars. 


THE  CURSE  OF  THE  GIANTS  19 

Is  the  capital  stock  of  this  corporation  as 
well  as  the  bonds  being  constantly  increased 
also? 

Yes.  The  capital  stock  was  increased 
nearly  18  million  dollars  within  a  year  or 
two  prior  to  the  annual  meeting  in  1906, 
to-wit,  from  something  over  132  millions 
to  150  millions,  and  at  the  annual  meeting 
of  the  stockholders  April  18,  1906,  a  still 
further  increase  of  the  capital  from  150 
millions  to  250  millions  was  ordered. 

How  much  are  the  annual  net  profits  of 
this  corporation? 

According  to  their  latest  official  report, 
more  than  sufficient  to  pay  eight  per  cent 
annually  on  its  combined  capital  and  au- 
thorized debt  of  400  millions  of  dollars. 

Nevertheless,  will  not  these  millions  and 
hundreds  of  millions  of  bonds  have  to  be 
paid  at  some  time! 

It  is  the  intention  that  they  shall  be  paid 
MANY  TIMES  OVER  IN  ANNUAL 
INSTALLMENTS  OF  INTEREST.  IT 
IS  NOT  THE  EXPECTATION,  AVISH 
OR  INTENTION  THAT  THEY  WILL 
EVER  BE  PAID  IN  ANY  OTHER 
MANNER.  They  are  to  all  intents  and 
purposes  a  blanket  mortgage  on  the  peo- 
ple, to  be  paid  by  the    public    as    above 


20  THE  CURSE  OF  THE  GIANTS 

Stated,  AND  NOT  OTHERWISE.  The 
original  ^"bonded  debt"  of  the  New  York 
Central  and  Hudson  River  Railroad,  14 
millions,  has  already  been  paid  more  than 
twice  over  in  semi-annual  interest  install- 
ments since  the  company  was  organized 
nearly  40  years  ago,  and  yet  this  same 
''debt,"  so-called,  forms  a  portion  of  the 
230  millions  and  more  on  which  it  is  the 
expectation  of  the  stockholders  and  the 
bondholders  that  interest  shall  be  collect- 
ed from  the  people  semi-annually  for  the 
next  century.  As  we,  and  our  fathers  be- 
fore us,  have  been  taxed  to  pay  interest  on 
these  bonds,  so  it  is  the  intention  and  ex- 
pectation to  continue  to  tax  the  present 
generation,  our  children  and  our  chil- 
dren's children,  perpetually.  And  to  this 
end  the  bonds  of  the  New  York  Central 
land  Hudson  River  Railroad  Company  have 
been  "converted"  or  ''refunded"  into 
bonds  not  due  and  payable  in  less  than 
100  years  from  date. 


CHAPTER  in. 

long  credits — 100  years;  150  years;  475 
years;  500  years. 

Is  it  customary  for  corporations  to  issue 
bonds  for  such  long  terms  as  an  hundred 
years  ? 


THE  CURSE  OF  THE  GIANTS  21 

Yes.  Bonds  issued  for  periods  of  100 
years  and  longer  i^eriods,  are  listed  on  the 
New  York  Stock  Exchange  the  aggregate 
value  of  which  exceeds  one  billion  and  five 
hundred  millions  of  dollars. 

Are  bonds  issued  then  for  longer  terms 
than  100  years? 

Yes,  for  much  longer  terms. 

Name  one  or  more  coriDorations  which  have 
issued  bonds  fixing  the  date  of  maturity  more 
than  100  years  in  the  future. 

Bonds  of  the  Northern  Pacific  Eailway 
Company  to  the  amount  of  56  million  dol- 
lars, payable  150  years  after  date,  namely, 
in  the  year  2047,  bearing  37o  interest,  are 
outstanding;  the  bonds  of  the  West  Shore 
Eailroad  (fifty  millions)  were  issued  in 
1886  for  a  period  of  475  years,  maturing 
in  the  year  2361 ;  and  the  Commercial  Cable 
Company  of  New  York  issued  bonds  in 
1897  to  the  amount  of  several  millions  of 
dollars,  payable  500  years  after  date, 
namely,  in  the  year  2397. 

What  was  the  total  income  of  seven  Amer- 
ican life  insurance  companies  during  the  year 
1907? 

Over  450  million  dollars.   ($451,463,232.) 

Does  the  total  annual  coinage  of  United 
States  money  at  all  the  mints  of  the  United 


22  THE  CURSE  OF  THE  GIANTS 

States  equal  the  annual  income  of  all  the  life 
insurance  companies? 

There  has  never  been  a  single  year  (ex- 
cepting only  the  year  1904)  when  the  ag- 
gregate value  of  all  the  gold,  silver  and 
copper  coined  at  all  the  mints  of  the 
United  States  was  sufficient  to  pay  one-half 
of  the  total  income  of  these  seven  life  in- 
surance companies  for  the  year  1907.  The 
income  of  these  seven  life  insurance  com- 
panies for  the  year  1907  was  $17,980,695 
greater  than  the  total  face  value  of  all  the 
gold,  silver  and  copper  coined  at  all  the 
mints,  from  1792  up  to  and  including  the 
year  1855  (63  years).  Since  the  mints  were 
established  in  1792,  there  has  been  only  six 
years  when  the  aggregate  coinage  at  the 
several  mints  reached  the  sum  of  $100,000,- 
000,  and  only  one  year  (1904)  when  the  to- 
tal value  reached  $200,000,000. 

What  were  the  total  disbursements  of  the 
seven  American  life  insurance  companies 
above  mentioned  during  the  same  year,  1907? 

About  300  millions.     ($300,641,817.) 

And  the  difference  between  the  total  in- 
come and  the  total  expenditures,  namely,  150 
million  dollars,  how  are  the  people  affected 
by  that? 

The  difference  of  150  millions ;  that  goes 


THE  CURSE  OF  THE  GIANTS  23 

to  swell  the  assets.  In  other  words,  it  is 
converted  into  public  debts,  stocks,  bonds, 
mortgages,  etc.,  and  at  57o  costs  the  people 
seven  and  one-half  millions  of  dollars  and 
more  each  year. 

Of  the  total  public  debts  on  which  the  peo- 
ple are  taxed  perpetually  to  pay  interest, 
dividends,  rent  and  profit,  how  much  have 
been  aceumiulated  by  these  same  seven  life 
insurance  companies?  In  other  words,  what 
was  the  sum  total  of  their  assets  at  the  close 
of  business,  December  31,  1907? 

Over  two  thousand  millions  of  dollars. 
($2,154,011,608.) 

Having  learned  that  the  sum  total  of  the 
public  debts  is  "not  less  than  eighty  thou- 
sand millions  of  dollars,"  does  this  language 
fully  express  the  tremendous  import  and  sig- 
nificance of  financial  conditions  that  NOW 
confront  the  American  people? 

No.  The  sum  total  of  the  public  debts 
is  much  greater  than  80  billions  of  dollars. 
The  people  of  the  United  States  are  pay- 
ing interest,  dividends  and  rents  on  pub- 
lic debts,  various  forms  of  investments,  ag- 
gregating not  less  than  100  billions  of  dol- 
lars. As  relentlessly  as  interest  on  mort- 
gages, this  quite  incomprehensible  sum  of 


24  THE  CURSE  OF  THE  GIANTS 

debt  grows  larger  and  larger  with  each 
recurring  year.  The  minimum  of  incre- 
ment is  not  less  than  five  billions  each  year. 

Is  it  a  common  occurrence  for  corporations 
to  increase  their  stock  and  bonds  as  illus- 
trated in  the  case  of  the  New  York  Central 
Company  I 

Yes.  During  the  past  ten  years  the 
Pennsylvania  Eailroad  more  than  doubled 
its  capital,  having  increased  the  same  from 
$129,301,550  to  $307,627,700  besides  issuing 
millions  upon  millions  of  additional  bonds. 
March  12,  1907,  a  still  further  issue  of  100 
millions  of  bonds  and  also  100  millions  of 
stock  was  voted. 

Can  other  similar  cases  be  cited? 

A  large  book  indeed  would  be  required 
to  record  all  the  various  operations  of 
stock-waiering  and  other  ways  of  increas- 
ing public  debts  for  the  financial  benefit  of 
the  creditor  classes,  the  bondholders.  In 
December,  'OG,  the  Pullman  Company  in- 
creased its  capital  from  74  millions  to  100 
millions  by  the  payment  of  "a  367©  stock 
dividend."  The  same  month  sixty  millions 
of  "new  stock"  was  voted  by  the  Great 
Northern  Company.  About  the  same  time 
the  Wabash  Company  "converted"  about 
136  millions  of  "funded  debt"  into  "a  new 
issue"  of  200  millions  of  fifty  year  bonds, 


THE  CURSE  OF  THE  GIANTS  25 

and  voted  to  increase  their  certificates  of 
indebtednes  of  capital  stock  from  102  mil- 
lions to  an  even  200  millions.  These  cases 
•will  serve  for  purposes  of  illustration. 

Mention  one  or  two  more  recent  illustra- 
tions of  the  increase  of  the  public  debts. 

A  press  dispatch  dated  May  28,  1908,  re- 
lates the  filing  of  a  ''mortgage"  for  300 
million  dollars  by  the  Chicago,  Burlington 
and  Quincy  Railroad  Company.  The  an- 
nual interest  on  that  sum  at  5%  will  be 
fifteen  million  dollars.  In  the  press  dis- 
patch referred  to  it  is  stated  that  172  mil- 
lions is  to  be  used  in  ''refunding  indebted- 
ness" which  means  indefinitely  extending 
the  time  on  which  the  public  will  be  re- 
quired to  pay  the  annual  interest  charges, 
and  "the  remainder  will  be  spread  over  a 
period  of  fifty  years."  It  has  also  been 
recently  announced  that  the  Standard  Oil 
Company  will  increase  its  capital  from  $98,- 
338,300  to  half  a  billion  dollars. 

Are  there  any  official  records  from  which 
an  accurate  knowledge  of  the  volume  of  public 
debts  may  be  obtained? 

No.    For  several  obvious  reasons.    The 
■  debts  increase  so  rapidly  that  records  must 
necessarily  be  incomplete;  and,  moreover, 
it   is   considered  indiscreet  by  the  bond- 
holding  classes  to  furnish  information  on 


26  THE  CURSE  OF  THE  GIANTS 

the  subject.  The  aggregation  of  stocks, 
bonds,  mortgages  and  "other  certificates 
of  indebtedness"  EXCEEDS  ONE  HUN- 
DEED  THOUSAND  MILLIONS  OF  DOL- 
LARS AND  THE  AGGREGATION  AC- 
CELERATES MORE  RAPIDLY  THAN 
AT  5%  PER  ANNUM. 

If  it  is  considered  indiscreet  to  publish  the 
facts  relating  to  the  public  debts,  is  it,  con- 
versely, considered  discreet  to  misinform  or 
mislead  the  people  concerning  the  actual  con- 
dition of  affairs? 

Yes.  It  is  considered  shrewd  ''business 
policy"  to  deceive  the  people  systematical- 
ly in  matters  relating  to  the  volume  of  pub- 
lic debts  and  the  enormous  profits  accruing 
from  certain  lines  of  public  business  such 
as  the  railroad  business,  banking,  telegraph 
business,  the  telephone  business  and  certain 
other  lines  that  might  be  mentioned.  As- 
tounding as  the  affirmation  will  appear  to 
many  people,  it  is  nevertheless  a  fact  that 
the  people  have  been  burdened  with  debts 
which  they  will  never  be  able  to  pay  and 
that  without  either  their  knowledge  or  con- 
sent. 

What  incident  in  the  history  of  American 
finances  may  be  cited  as  at  least  prima  facie 
evidence  that  the  bondholding  classes  have 


THE  CURSE  OF  THE  GIANTS  27 

established  the  doctrine  that  the  public  debts 
must  be  made  perpetual ;  must  never  be  paid  ? 

In  July,  1865,  just  at  the  close  of  the 
war  of  the  rebellion.  Jay  Cook,  the  great 
war  financier,  fiscal  agent  of  the  Govern- 
ment, and  general  spokesman  for  the  na- 
tional bank  interests,  issued  a  pamphlet  in 
which  that  doctrine  was  proclaimed  and  de- 
fended. He  said:  ''We  lay  down  the 
proposition  that  our  national  debt,  MADE 
PEKMANENT,  and  rightly  managed, 
WILL  BE  A  NATIONAL  BLESSING. 
The  funded  debt  of  the  United  States  is 
the  ADDITION  OF  3,000  millions  of  dol- 
lars to  the  previously  realized  wealth  of 
the  nation.  It  is  3,000  millions  added  to 
the  available  actual  capital.  TO  PAY 
THIS  DEBT  WOULD  BE  TO  EXTIN- 
GUISH THIS  CAPITAL  AND  LOSE 
THIS  WEALTH. 


CHAPTER  IV. 

PROFITS    HIDDEN    AS   EXPENSE. 

How   do   corporations   habitually   deceive 
the  people  concerning  profits? 

By  distributing  millions  of  profits  dis- 
guised as  expenses. 

Illustrate  this  last  question  and  answer  by 
citing  a  single  case  in  point. 


28  THE  CURSE  OF  THE  GIANTS 

Many  years  ago,  when  finances  were 
less  "frenzied"  than  in  this  generation, 
the  Erie  Railroad  Company  paid  its  pres- 
ident in  one  lump  sum  $150,000  as  an 
advance  payment  on  account  of  salary  at 
the  rate  of  $15,000  per  year  for  ten  years. 
The  balance  ($25,000  per  j^ear)  was  paid 
in  the  usual  manner,  namely,  in  regular 
equal  installments  periodically.  Thus  in 
one  item  $150,000  in  profit,  a  sum  suffi- 
cient to  pay  a  considerable  dividend  on 
the  stock  at  that  time,  was  distributed  as 
** operating  expenses"  and  the  indisput- 
able claim  set  up  that  operating  expenses 
were  heavy  and  consequently  dividends 
were  necessarily  small.  Other  similar 
transactions  might  have  been  and  prob- 
ably were  resorted  to.  In  this  day  and 
generation  similar  practices  for  similar 
purposes  on  a  much  more  magnificent 
scale,  however,  are  common  occurrences. 
For  instance,  it  is  a  common  custom  to 
vote  favored  stockholders  (officials)  enor- 
mous salaries,  and,  as  salaries  are  charged 
to  operating  expenses,  the  large  salaries 
are  hidden  in  the  expense  account,  and  the 
decreased  dividends  always  furnish  a  con- 
venient pretext  for  increased  freight  and 
passenger  rates. 

Can  the  same  idea  be  illustrated  by  other 
modern  execrations  similar  in  principle? 


THE  CURSE  OF  THE  GIANTS  29 

Yes.  In  New  York  state  railroad  com- 
panies have  been  required  to  make  de- 
tailed annual  reports  of  income  and  oper- 
ating expenses  in  forms  prescribed  by  law 
for  more  tlian  half  a  century.  A  critical 
analysis  of  these  annual  reports  shows  as- 
tonishingly exorbitant  expenses  for  print- 
ing and  stationery,  salaries  and  wages,  re- 
pairs to  track  and  roadbed,  engines,  cars 
and  various  other  items.  Roads  equipped 
with  every  facility  for  keeping  their  roll- 
ing stock  in  good  repair  with  the  least  ex- 
penditure of  money  will  report  enormous 
amounts  as  paid  for  wages  to  men  em- 
ployed in  roundhouses.  In  addition  to 
such  wages,  the  same  roads  will  report 
hundreds  of  thousands  of  dollars  for  re- 
pairs to  engines  and  cars.  Not  infrequent- 
ly the  sums  reported  as  paid  for  repairs 
to  engines  average  above  $2,500  a  year  for 
every  engine  owned  or  leased  over  and 
above  wages  reported  as  having  been  paid 
to  men  employed  in  roundhouses. 

In  the  early  history  of  railroads,  what 
legal  iDroviso  was  established  that  the  peo- 
ple might  participate  in  the  profits? 

By  the  organic  law  of  Illinois,  the  Illi- 
nois Central  Railroad  Company  was  and 
now  is  required  to  pay  7  per  cent  of  its 
gross  income  into  the  state  treasury.    In 


30  THE  CURSE  OF  THE  GIANTS 

those  days  10  per  cent  was  considered 
ample  profit,  and  in  New  York  state  the 
railroad  law  originally  provided  that  all 
profit  in  excess  of  10  per  cent  should  re- 
vert to  the  state  treasury. 

Have  the  people  in  these  two  states  real- 
ized any  substantial  advantage  from  the 
legal  requirements  mentioned! 

It  is  hard  to  defeat  a  plain,  specific,  con- 
stitutional mandate,  and  accordingly  the 
Illinois  Central  has  paid  many  millions  of 
dollars  into  the  Illinois  state  treasury 
pursuant  to  the  state  constitution;  yet, 
nevertheless,  it  is  claimed  that  the  state 
has  been  defrauded  of  many  millions  dur- 
ing the  same  time  (58  years)  by  reason  of 
a  system  of  fraudulent  accounting.  The 
treasury  of  the  State  of  New  York  never 
realized  as  much  as  a  single  penny  from  its 
statutory  law,  the  railroads  having  had 
little  difficulty  in  distributing  many  mil- 
lions of  profits  disguised  as  expenses. 

What  ratio  or  proportion  does  the  net  in- 
come of  the  United  States  Steel  Corporation 
bear  to  the  total  income  of  the  bondholding 
investing  classes  from  the  entire  aggregation 
of  public  debts? 

As  we  have  learned  that  the  total  public 
debts  are  an  unknown  quantity,  it  is  mani- 
festly impossible  to  answer  that  question 


THE  CURSE  OF  THE  GIANTS  31 

with  precision.  Tlie  net  income  of  tlie 
United  States  Steel  Corporation  for  1906 
was  more  than  sufficient  to  pay  5  per  cent 
interest  on  three  thousand  millions  of  dol- 
lars. If  the  annual  payment  of  interest 
and  dividends  on  all  stocks  and  bonds  of 
all  the  railways,  all  national,  state,  county, 
city,  town,  village  and  school  district 
bonds,  the  stocks  and  bonds  of  national 
banks  and  insurance  companies,  plus  all 
real  estate  mortgages,  all  industrial  stocks 
and  bonds  and  the  various  other  forms  of 
debt  paid  in  interest,  rent,  profit  and 
taxes,  is  equal  to  forty  times  the  net  in- 
come of  the  United  States  Steel  Corpora- 
tion for  1906,  then  it  is  clear  that  the 
people  of  the  United  States  are  paying 
what  is  equivalent  to  the  interest  on  an 
aggregation  of  investments  (debts)  in  ex- 
cess of  125  billions  of  dollars. 

Does  the  income  from  interest  and  divi- 
dends on  the  present  debts  create  more 
debt? 

Yes.  We  have  learned  that  a  single 
corporation  accumulates  a  half  million 
dollars  daily  in  net  profit.  More  stocks  and 
more  bonds  have  to  be  created  to  reinvest 
these  accumulated  millions.  The  millions 
and  billions  accumulate  perpetually.  Divi- 
dends on  stocks  and  interest  on  bonds  ne- 
cessitate a  demand  for  more  bonds,  hence 


32  THE  CURSE  OF  THE  GIANTS 

more  bonds  must  be  printed  to  satisfy  the 
endless  demand.  Ergo,  public  debts  will 
increase  nnder  present  conditions  many- 
billions  of  dollars  annually. 

What  further  evidence  may  be  cited  to 
prove  that  public  debts  are  increasing  at  the 
rate  of  5  per  cent  annually,  or  even  at  a 
greater  rate? 

The  Secretary  of  Internal  Affairs  of  the 
State  of  Pennsylvania  reports  under  date 
of  January  15,  1907,  that  the  total  capital- 
ization of  railroad  companies  reporting  to 
that  state  has  increased  from  1887  to  1906 
(19  years)  ''nearly  three  thousand  mil- 
lions of  dollars,"  to-wit,  from  $1,559,019,- 
521  m  1887  to  $4,304,880,297  in  1906,  an 
increase  exceeding  9  per  cent  annually. 

What  may  be  said  concerning  the  profits 
accruing  from  the  business  of  transporting 
freight  and  passengers  by  railway? 

The  profits  from  railway  transporta- 
tion are  much  greater  than  is  generally 
known  or  realized. 

Can  railway  companies  carry  passengers 
at  the  rate  of  two  cents  a  mile  at  a  fair 
profit  ? 

Yes;  at  even  a  lesser  rate. 

Can  railway  companies  carry  passengers 


THE  CURSE  OF  THE  GIANTS  33 

at  one  cent  a  mile  and  still  make  a  fair  prefix 
at  that  rate? 

There  is  not  the  shadow  of  a  doubt  that 
railways  equipped  as  all  first-class  railways 
are  equipped,  can  carry  passengers  at  a 
rate  even  less  than  one  cent  a  mile  at  a 
fair  rate  of  profit. 

State  in  few  words  what  good  reason  can 
be  advanced  justifying  that  conclusion. 

Railways  are  moving  freight  a  distance 
of  1,065  miles  at  the  rate  of  $3.14  a  ton. 
They  will  carry  30  tons  of  flour  1,065  miles 
for  $94.20.  Two  hundred  passengers 
weighing  an  average  of  300  pounds  each, 
including  baggage,  equals  30  tons.  One 
passenger,  300  pounds,  carried  1,000  miles 
at  one  cent  a  mile,  pays  the  railroad  $10 
and  200  passengers  at  the  same  rate,  one 
cent  a  mile,  pays  the  railroads  $2,000,  or 
more  than  twenty  times  the  rate  they 
charge  for  moving  flour.  (More  on  this 
point  further  on.) 

What  is  the  minimum  rate  for  transport- 
ing freight  by  rail? 

There  is  no  minimum  rate.  For  special 
reasons  freight  is  sometimes  carried^  for 
specially  influential  persons  at  specially 
low  rates,  just  as  judges  and  law  makers 
frequently  ride  in  palace  cars  scott  free. 


34  THE  CURSE  OF  THE  GIANTS 

Can  freight  be  moved  from  New  York  to 
Buffalo  at  $5  a  ton  returning  to  the  trans- 
portation companies  a  fair  profit? 

Yes.  Four  thousand  tons  of  freight  may 
be  moved  from  New  York  to  Buffalo  in  one 
train.  At  $5  per  ton,  the  charge  therefor 
would  be  $20,000.  The  cost  for  wages  of 
train  crew,  fuel  and  other  expenses  inci- 
dental to  the  trip  would  be  considerably 
less  than  $1,000,  leaving  more  than  $19,000 
to  pay  dividends,  wear  and  tear,  taxes  and 
salaries  of  officers. 

How  much  does  the  New  York  Central  and 
Hudson  River  Railroad  Company  receive  for 
carrying  the  United  States  mails  from  New 
York  to  Buffalo? 

The  Government  pays  the  New  York 
Central  and  Hudson  River  Railroad  Com- 
pany $31.73  a  ton  for  hauling  mail  between 
the  cities  of  Buffalo  and  New  York.  The 
cost  of  fuel,  wages  and  other  trip  expenses 
for  hauling  a  ton  of  mail  or  freight  be- 
tween the  Wo  cities  is  less  than  25  cents. 

If  a  ton  of  freight,  which  must  needs  be 
loaded  and  unloaded,  can  be  moved  a  dis- 
tance of  441  miles  for  two  dollars  at  a  good 
profit,  is  the  charge  less  than  $2  a  ton  for 
carrying  passengers  the  same  distance,  con- 


THE  CUESE  OF  THE  GIANTS  35 

sidering  that  passengers  get  on  and  off  the 
cars  without  trouble  or  expense  to  the  trans- 
portation company! 

No.  A  passenger  weighing  150  pounds 
is  charged  $9.25  for  riding  from  New  York 
to  Buffalo,  which  is  at  the  rate  of  $123.33 
a  ton.  A  passenger  weighing  only  100 
pounds  is  charged  the  same  rate  which  is 
at  the  rate  of  nine  and  one-fourth  cents 
a  pound  or  $185  a  ton.  If  the  passenger 
wishes  to  ride  in  a  palace  car  the  rate  is 
much  more  per  ton.  Whether  the  passen- 
ger has  baggage  to  carry  or  not  makes  no 
difference  except  that  baggage  in  excess 
of  150  pounds  is  charged  extra  rates. 

What  is  the  ton  rate  for  carrying  passen- 
gers over  the  Pennsylvania  road  between 
Chicago  and  Pittsburg? 

One  hundred  and  forty  dollars  in  ordi- 
nary passenger  coaches;  more  than  that 
for  riding  in  palace  cars. 

Wliat  is  the  carload  rate  for  moving  flour 
from  Milwaukee  to  New  York? 

Fifteen  and  seven-tenths  cents  per  hun- 
dred pounds,  or  $3.14  per  ton. 

If  the  railroads  can  carry  100  pounds  of 
flour  1,065  miles  for  16  cents,  will  they  carry 
a  passenger  weighing  100  pounds  who  walks 


36  THE  CURSE  OF  THE  GIANTS 

on  and  off  the  cars  at  no  expense  to  the  rail- 
roads, for  the  same  amount  (16  cts.),  or  less? 

No.  The  ordinary  passenger  fare  from 
Milwaukee  to  New  York  is  $21.70.  If  the 
passenger  prefers  a  parlor  car,  the  rate 
is  $27.05. 

If  100  persons  weighing  300  pounds  each, 
including  baggage  (15  tons  all  told),  were  to 
travel  from  Milwaukee  to  New  York  in  two 
cars  over  the  Pennsylvania  lines,  each  pay- 
ing the  full  parlor  car  rate  ($27.05),  what 
would  be  the  transportation  company's  in- 
come, the  trip  expenses  and  the  profit? 

The  income  would  be  $2,705;  expenses 
for  wages  of  conductors,  engineers,  brake- 
men,  fuel,  and  all  other  incidental  trip  ex- 
penses would  not  exceed  $200  leaving  $2,- 
500  to  pay  dividends,  wear  and  tear,  taxes 
and  salaries  of  officers. 

How  much  flour  will  the  railroads  carry 
from  Milwaukee  to  New  York  for  the  same 
money  they  charge  for  carrying  15  tons  of 
passengers  the  same  distance  as  above  cal- 
culated? 

Eight  hundred  and  sixty-one  tons. 

At  the  same  rate  charged  for  moving  grain 
or  grain  product,  from  Milwaukee  to  New 
York,  namely  $3.14  per  ton  of  2,000  pounds, 


THE  CURSE  OF  THE  GIANTS  37 

what  would  be  the  charge  for  carrying  a  pass- 
enger weighing  200  pounds  from  New  York 
to  San  Francisco? 

Eating  the  distance  by  rail  to  be  3,258 
miles,  the  charge  would  be  less  than  97 
cents.    (96.111  cents.) 

From  all  the  foregoing  then,  it  appears  that 
40  tons  of  freight  is  carried  a  given  distance 
frequently  for  less  money  than  is  charged 
for  carrying  a  ton  of  passengers  the  same 
distance.    Is  this  conclusion  correct? 

Yes;  this  fact  will  become  more  clear  to 
the  student  the  more  the  subject  is  studied. 
Moreover  the  passenger  traffic  is  enhanced 
by  profits  realized  from  feeding  passengers 
enroute  and  for  other  extra  charges. 

Can  the  enormous  profits  from  railway 
transportation  be  estimated  from  any  data 
accessible  to  the  public? 

All  data  accessible  to  the  public  is  fur- 
nished by  the  transportation  companies 
from  force  of  circumstances  (sometimes  by 
legal  requirement,  and  sometimes  as  a  mat- 
ter of  expediency),  designed  rather  to  de- 
ceive than  to  furnish  correct  information 
concerning  the  enormous  profits  actually 
realized.  Public  reports  being  unreliable, 
estimates  may  be  the  more  correct, 

389218 


38  THE  CURSE  OF  THE  GIANTS 

CHAPTER  V. 

PUBLIC  REPOKTS  INTENTIONALLY  INCOREECT. 

What  facts  may  be  cited  to  sustain  the  sug- 
gestion that  the  semi-public  reports  of  cor- 
porations are  misleading  or  deceptive? 

More  than  fifty  years  ago  the  State  En- 
gineer and  Surveyor  of  New  York,  to 
whom  the  railroads  of  that  state  were  re- 
quired to  make  detailed  reports  annually, 
reported  to  the  New  York  Legislature  that 
the  said  reports  were  ''notoriously  incor- 
rect, and  in  many  cases  made  so  system- 
atically, for  the  purpose  of  concealing 
from  the  public  violations  of  law  and  want 
of  fidelity  to  their  trusts,"  and  that  "no 
reliance  whatever  can  be  placed  upon  any 
general  conclusions  as  to  the  cost  or  profit 
of  railroad  transportation  as  exhibited  by 
these  reports."  (See  Senate  document 
number  35,  N.  Y.,  1855.)  Intelligent  peo- 
ple who  have  had  occasion  to  look  deeply 
into  the  matter  know  that  these  words 
were  true  at  that  time;  and  that  they  are 
equally  true  to  this  day.     (See  appendix.) 

Can  any  evidence  be  cited  more  conclusive 
than  the  mere  assertion  that  the  reports  of 
railroad  corporations  since  1855  are  unre- 
liable? 


THE  CURSE  OF  THE  GIANTS  39 

Yes.  See  report  of  New  York  Board  of 
Railroad  Commissioners  for  1883.  Here 
the  public  is  informed  that ' '  many  of  these 
reports  are  made  with  consummate  skill 
to  deceive  both  the  stockholders  and  the 
people,  while  others  are  so  loosely  drawn 
as  to  excite  only  ridicule  and  disgust." 

'What  further  evidence  to  the  same  effect 
of  a  still  more  recent  date  may  be  referred 
to? 

For  the  fiscal  year  ending  June  30,  1906, 
the  New  York  Central  and  Hudson  Eiver 
Railroad  Company  reported  to  the  Board 
of  Railroad  Commissioners  of  the  State 
of  New  York  that  the  ' '  average  number  of 
persons,  including  officials,  employed  dur- 
ing the  year  was  49,255, ' '  and  ' '  the  aggre- 
gate amount  of  salaries  and  wages  paid 
during  the  year  was  $33,988,520.69."  Ac- 
cording to  the  report  of  the  Secretary  of 
Internal  Affairs  of  the  State  of  Penn- 
sylvania for  exactly  the  same  period  of 
time,  the  year  ending  June  30,  1906,  this 
item  appears,  in  these  words  and  figures: 
''The  number  of  employes  this  year  was 
54,723,  and  the  total  compensation  paid 
them  was  $37,996,114."  Note  the  discrep- 
ancy of  5,468  in  number  of  employes  dur- 
ing the  year,  and  $4,007,594  in  wages  re- 
ported to  have  been  paid. 

Are  there  any  other  discrepancies  between 


40  THE  CURSE  OF  THE  GIANTS 

the  New  York  and  Pennsylvania  reports  of 
the  N.  Y.  C.  &  H.  E.  K  Co.  for  the  same 
year? 

Yes.  While  some  of  the  items  are  iden- 
tical, others  differ  by  several  millions  of 
dollars,  and  altogether  they  are  so  contra- 
dictory ''as  to  excite  only  ridicnle  and  dis- 
gust." 

Wliat  was  the  gross  income  of  the  New 
York  Central  and  Hndson  Eiver  Eailroad 
Company  from  all  sonrces  whatsoever  for 
the  fiscal  year  ending  June  30,  1906,  accord- 
ing to  their  official  report  as  published  by  the 
Board  of  Eailroad  Commissioners  in  1907? 
$95,865,078.24. 

What  are  the  various  sonrces  of  income, 
and  how  mnch  income  is  reported  from  each 
different  sonrce? 

Additional  to  the  income  from  passenger 
and  freight  traffic,  and  the  income  from 
"miscellaneous  sources,"  ten  other  sources 
of  income  are  reported.  The  exact  amount 
reported  as  having  been  received  from 
each  diiferent  source  is  given  specifically 
in  the  appendix. 

How  many  tons  of  freiglit  are  reported  as 
having  been  carried  a  distance  of  one  mile  I 
More  than  eight  billions  and  five  hundred 


THE  CURSE  OF  THE  GIANTS  41 

millions.     The    exact    figures    are    8,542,- 
831,756. 

How  many  tons  does  that  equal  as  having 
been  carried  a  distance  of  441  miles,  the  dis- 
tance between  the  cities  of  Buffalo  and  New 
York? 

Nineteen  millions,  three  hundred  and 
seventy-one  thousand  and  five  hundred 
tons. 

How  many  passengers  were  carried  a  dis- 
tance of  one  mile! 

One  billion,  five  hundred  and  twenty- 
three  millions,  five  hundred  and  seventy- 
nine  thousand,  seven  hundred  and  fifty- 
nine. 

How  many  passengers  does  that  equal  as 
having  been  carried  441  miles,  the  distance 
between  New  York  and  Buffalo? 

Three  million,  four  hundred  and  fifty- 
four  thousand,  eight  hundred  and  twenty- 
nine. 

Eeckoning  the  income  of  the  Company  for 
passengers  carried  at  the  regular  rate 
charged  from  New  York  to  Buffalo  ($9.25), 
making  no  allowance  for  the  extra  income 
realized  from  passengers  riding  in  parlor 
ears,  and  estimating  the  average  income  of 


42  THE  CURSE  OF  THE  GIANTS 

the  freight  moved  the  distance  between  New 
York  and  Buffalo  at  $4  a  ton,  what  income 
would  the  Company  receive  from  its  freight 
and  passenger  traffic  only,  and  how  does  this 
amount  compare  with  the  gross  income  re- 
ported from  all  sources  whatsoever,  as  given 
in  the  sworn  official  report  of  the  Company 
for  the  year? 

As  computed  above  the  freight  and  pas- 
senger traffic  only,  aside  from  all  other 
sources  of  income,  would  yield  an  income 
of  $109,443,168.25,  or  $13,578,090.01  more 
than  the  total  gross  income  which  the  Com- 
pany reports  from  all  sources,  including  in- 
terest and  dividends  on  millions  of  stocks 
and  bonds  in  which  the  surplus  profits  of 
the  Company  have  been  invested. 

Is  there  reason  to  believe  that  a  thorough 
painstaking  investigation  of  the  business 
methods,  the  receipts  and  disbursements  of 
some  of  the  railroad  corporations,  including 
the  Pennsylvania  Company  and  the  New 
York  Central,  would  startle  the  world  even 
more  than  the  recent  investigation  of  the  big 
three  life  insurance  companies  of  New  York? 

Yes.  On  general  principles  there  ap- 
pears to  be  no  reason  to  conclude  that  men 
who  conduct  the  bulk  of  the  life  insurance 
business  are  less  honorable  than  the  men 


THE  CURSE  OF  THE  GIANTS  43 

who  control  transportation  companies.  As 
a  matter  of  fact  the  insurance  directorate 
and  the  transportation  directorate  are  very 
largely  composed  of  the  same  individuals. 
There  is  evidence  on  every  hand  that  for 
sinister  purposes  the  public  is  systematic- 
ally deceived  and  misinformed  relating  to 
the  profits  accruing  from  the  transporta- 
tion business. 


CHAPTEE  VI. 

GET  ETCH   QUICK  PROFITS. 

What  can  be  said  concerning  the  profits  of 
banks  and  trust  companies? 

The  same  as  may  be  said  of  the  trans- 
portation business;  the  profits  are  much 
greater  than  the  "common  people"  are 
aware  of. 

Does  the  accumulating  profits  of  banks  and 
trust  companies  increase  the  public  debts  at 
the  rate  of  5%  per  annum? 

Yes.     Much  more  than  5%  per  annum. 

Give  some  specific  data  warranting  this  af- 
firmation. 

There  are  no  complete  statistics  accu- 
rately exhibiting  the  profits  of  banks  and 
trust  companies.    The  author  has  made  a 


44  THE  CURSE  OF  THE  GIANTS 

compilation  from  the  Manual  of  Statistics 
of  the  profits  of  98  banks  and  trust  com- 
panies for  the  five  years  ending  with  1906. 
These  98  institutions  represent  all  sections 
of  the  country,  being  located  in  21  different 
states,  including  Maine,  Oregon,  Califor- 
nia, Texas  and  Florida. 

"What  was  the  capital  of  these  98  banks  and 
trust  companies  on  January  first,  1902? 

Ninety-three  millions,  three  hundred  and 
eighty-three  thousand,  and  one  hundred  and 
seventy-five  dollars. 

How  much  cash  did  they  divide  in  profits 
during  the  five  years  ending  December  31, 
1906? 

One  hundred  and  eleven  millions,  three 
hundred  and  eleven  thousand,  four  hun- 
dred and  eighty-one  dollars,  or  about  24 
per  cent  each  year  of  their  total  capital. 

Does  the  24  per  cent  of  annual  dividends 
indicate  the  sum  total  of  the  profits   real- 
ized by  these  98  banks  and  trust  companies? 
No.     In  addition  to  the  111  millions  (24 
per  cent  annually)  actually  distributed  in 
dividends  among  the  stockholders,  during 
the  same  time  a  further  profit  exceeding 
160   millions    ($160,604,098)    was   accumu- 
lated and  held  in  reserve   as    "imdivided 


THE  CURSE  OF  THE  GIANTS  45 

profits,"  wliicli  xDrofits  are  yet  to  be  di- 
vided. 

Do  the  above  figures,  the  divided  and  un- 
divided profits  as  above  indicated,  cover  the 
entire  profits  of  the  98  banks  and  trust  com- 
panies ? 

No.  During  the  same  period  they  in- 
creased their  capital  from  $93,383,175  to 
$122,488,175.  In  other  words,  the  total 
profits  during  these  five  years  approxi- 
mates 325  per  cent  of  the  original  capital, 
which  profits  were  distributed  as  follows : 
111  millions  phis,  divided  in  cash;  160 
millions,  plus,  held  in  reserve  for  future 
distribution,  and  29  millions  plus,  carried 
to  capital  account. 

How  much,  then,  were  the  public  debts  in- 
creased by  the  accumulated  profits  of  these 
98  institutions  during  the  five  years  under 
review  ? 

The  difference  between  the  present  cap- 
ital and  surplus,  compared  with  the  cap- 
ital and  surplus  five  years  ago,  or  about 
190  millions. 

Leaving  the  undivided  profits  out  of  con- 
sideration for  the  present,  state  the  divi- 
dends actualh^  distributed  by  some  particu- 
lar banks  in  the  list  under  consideration. 


46  THE  CURSE  OF  THE  GIANTS 

The  average  annual  dividends  of  the 
First  National  Bank  of  Harrisburg,  Pa., 
for  the  five  years  under  consideration 
were  28  per  cent;  Mercantile  Trust  Com- 
pany of  New  York,  30  per  cent;  Camden 
Safe  Deposit  Company,  32  per  cent; 
Fletcher  National  Bank  of  Indianapolis, 
36  per  cent;  Farmers'  Loan  &  Trust  Com- 
pany, New  York,  40  per  cent ;  Union  Trust 
Company,  48  per  cent;  United  States  Trust 
Company,  50  per  cent;  Marine  National 
Bank  of  Buffalo,  52  per  cent;  New  York 
County  National  Bank,  75  per  cent ;  United 
States  Mortgage  and  Trust  Company,  76 
per  cent;  Chemical  National  Bank  of  New 
York,  150  per  cent;  Fifth  Avenue  Bank 
of  New  York,  164  per  cent.  The  div- 
idend of  the  First  National  Bank  of  Scran- 
ton,  Pa.,  in  one  year  (1905)  was  444  per 
,  cent.  In  1901  the  dividends  of  the  First 
National  Bank  of  New  York  City  was  1,960 
per  cent  and  during  the  next  ensuing  five 
years  this  bank  distributed  eleven  millions 
and  three  hundred  thousand  dollars  among 
its  stockholders. 

An  Associated  Press  dispatch,  dated  No- 
vember 9,  1906,  says: 

''The  directors  of  the  State  Bank,  this 
city  (New  York),  today  declared  a  divi- 
dend of  900  per  cent,  payable  in  cash  on 
the  bank's  capitalization  of  $100,000.    The 


THE  CURSE  OF  THE  GIANTS  47 

directors  also  declared  tlie  usual  semi- 
annual dividend  of  50  per  cent  (making  an 
even  1,000  per  cent  for  the  year).  The  large 
surplus  the  bank  amassed,  bepanie  un- 
wieldly  because  of  its  small  capitalization 
and  in  order  to  obviate  this  the  directors 
decided  to  distribute  the  surplus  in  ^  the 
form  of  a  dividend.  It  also  was  decided 
to  increase  the  capitalization  of  the  bank 
from  $100,000  to  $1,000,000.  [This  is  an- 
other increase  of  the  public  debts  on  which 
the  dividends  or  interest  at  5  per  cent  will 
increase  the  public  burden  $45,000  per 
year.] 
Illustrate  the  profit  on  an  investment  for 

twenty  years  in  the  stock  of  the  Chemical 

National  Bank  of  New  York. 

The  par  value  of  shares  in  the  Chemical 
National  Bank  is  $100,  and  the  aggregate 
dividends  for  the  past  twenty  years  is 
3,000  per  cent.  Therefore  people  who  paid 
not  more  than  face  value  for  their  stock 
and  have  continuously  held  the  same  for  20 
years,  have  received  in  dividends  an  amount 
equal  to  their  entire  original  investment 
three  times  in  every  period  of  two  years. 
In  other  words  $30,000  for  each  $1,000  in- 
vested, and  the  present  market  value  of  ten 
shares  (par  value  $1,000)  is  more  than 
$42,000. 

How  can  the  fact  that  money  invested  in 


48  THE  CURSE  OF  THE  GIANTS 

National  Banks  produces  so  mncli  more  profit 
than  money  invested  in  farming,  be  ex- 
plained? 

By  aid  of  an  iniquitous,  inequitable  na- 
tional banking  system,  those  who  establish 
national  banks  are  enabled  to  appropriate 
to  themselves  the  wealth  that  the  farmer 
and  others  produce. 

At  what  period  in  the  history  of  the  nation 
did  the  present  debt  creating  epoch  take  root? 
In   1862,    when    the   present    iniquitous 
banking  system  was  established. 

Was  this  national  banking  system  estab- 
lished as  a  climax  or  culmination  of  intelli- 
gent patriotic  discussion  and  inquiry  as  to 
the  financial  policy  best  calculated  to  promote 
the  prosperity  of  all  the  people? 

No.  On  the  contrary,  the  American  bank- 
ing system  as  established  in  1862,  was  es- 
tablished in  the  interest  of  British  capital- 
ists. It  was  cunningly  based  on  a  national 
debt  and  designed  to  perpetuate  a  system 
of  debt  and  bondage ;  to  create  a  bond-hold- 
ing, money  lending  class,  privileged  to  live 
in  idleness  and  luxury  on  the  labor  and 
products  of  bond-servants.  In  operation 
thus  far  it  has  proved  all  that  its  orig- 
inators could  have  hoped  for. 

What  evidence  can  be  produced  in  support 


THE  CURSE  OF  THE  GIANTS        49 

of  the  affirmation  that  British  capitalists  were 
instrumental  in  the  enactment  of  the  national 
bank  act  of  1862? 

The  famous  Hazzard  circular  issued  in 
1862,  for  the  full  text  of  which  see  appendix. 

When  the  present  American  banking  sys- 
tem was  in  its  infancy,  what  other  famous 
circular  letter  was  sent  to  all  money  loaning 
and  banking  institutions  by  the  associated 
banks  of  New  York  City? 

After  the  national  banking  system  had 
been  in  existence  15  years,  and  the  people 
were  earnestly  advocating  its  repeal,  and 
the  repeal  of  the  act  demonetizing  silver 
(also  enacted  at  the  instigation  of  English 
capitalists,  in  1873),  at  a  time  when  the 
people  were  calling  loudly  for  more  United 
States  money,  in  October,  1877,  the  asso- 
ciated banks  of  New  York  City  appealed 
to  the  money-lending,  bond-holding  classes 
generally,  by  means  of  what  is  now  known 
in  financial  history  as  "the  Buel  circular," 
a  copy  of  which  is  reproduced  in  the 
appendix.  This  circular  should  be  read 
and  pondered  over  by  all  people  who  have 
been  taught  to  believe  that  the  national 
banking  system  is  a  model  of  excellence 
altogether  indispensable  to  the  welfare  of 
the  people. 


50  THE  CURSE  OF  THE  GIANTS 

At  what  other  period  and  for  what  pur- 
pose did  the  money  trust  issue  a  circular  let- 
ter the  effects  of  which,  considered  in  con- 
junction with  other  political  events,  marks 
an  epoch  in  American  financial  history? 

March  12,  1893,  was  issued  the  famous 
panic  circular.  Its  confessed  purpose  was 
to  counteract  (defeat)  the  will  of  the  peo- 
ple. 

Why  is  this  circular  designated  ''the  panic 
circular"? 

It  was  designed  to  create  a  panic;  "to 
make  a  monetary  stringency  felt;"  de- 
signed to  "at  once  retire  one-third  of  all 
bank  circulation"  and  "one-half"  of  all 
bank  loans.  The  great  panic,  "hard- 
times,"  of  1893  followed  as  the  inevitable 
consequence. 

How  could  such  a  condition  of  affairs  ben- 
efit the  banks? 

In  various  ways  too  numerous  to  men- 
tion in  "a  short  catechism."  An  instance 
in  point:  A  business  man  owns  a  parcel 
of  real  estate  worth  upwards  of  $75,000, 
against  which  property  a  bank  holds  a  first 
mortgage  for  a  loan  of  $25,000  due  April 
first,  1893.  Owing  to  the  universal  "mone- 
tary stringency"  created  by  the  banks  for 
their  own  special  profit,  the  owner  is  un- 


THE  CURSE  OF  THE  GIANTS  51 

able  to  raise  ready  money  to  satisfy  the 
mortgage.  The  bank  forecloses  and  as- 
sumes ownership  in  fee  simple  and  there- 
after rents  the  property  at  an  annual  ren- 
tal of  $10,000  and  some  years  later  sells 
the  same  property  for  $125,000. 

Why  did  the  banks  choose  this  particular 
time  to  create  a  panic? 

It  was  a  critical  period  in  the  history 
of  American  monetary  affairs.  In  spite 
of  the  sinister  influences  of  Wall  Street, 
silver  had  been  restored  to  coinage  and 
"the  crime  of  1873"  had  been  exposed, 
which  crime  consisted  in  demonetizing  sil- 
ver by  an  act  of  Congress  without  even 
the  knowledge  or  intent  of  the  Senators 
and  Eepresentatives  in  Congress  whose 
votes  legalized  the  act.  The  Bland-Allison 
silver  coinage  act  of  1878,  although  serious- 
ly handicapped  by  Wall  Street  influences, 
had  vindicated  the  claims  of  its  authors; 
and  the  Sherman  silver  bill,  enacted  in 
1890,  only  three  years  prior,  authorized  the 
coinage  of  about  double  the  quantity  of 
silver  dollars  that  the  Bland  act  had  pro- 
vided for.  As  very  correctly  expressed  in 
''the  panic  circular,"  THEEE  WAS  "an 
increasing  sentiment  in  favor  of  Govern- 
ment legal  tender  notes  and  silver  coin- 
age." The  issue  of  silver,  gold,  United 
States     treasury    notes,     greenbacks — all 


52  THE  CURSE  OF  THE  GIANTS 

forms  of  United  States  money— being  an- 
tagonistic to  the  selfisli  interests  of  the 
money  lenders,  it  was  and  is  very  plain 
that  "it  will  not  do"  (from  the  bondhold- 
ers' standpoint)  '*to  allow  greenbacks" 
(United  States  money)  "to  circulate,"  for 
the  very  reason  that  they  (the  bondhold- 
ers) "cannot  control  that" — United  States 
money. 

What  method  of  procedure  did  the  panic 
circular  recommend  for  the  purpose  of  de- 
feating the  will  of  the  people! 

It  recommended  nothing  less  than  an  ex- 
tra session  of  Congress  for  the  sole  pur- 
pose of  demonetizing  silver  again,  urging 
"the  unconditional  repeal"  of  the  Sherman 
silver  bill ;  and  this  notwithstanding  its  own 
declaration  that  THERE  WAS  AT  THAT 
VERY  TIME  "AN  INCREASING  SEN- 
TIMENT* IN  FxlVOR  OF  GOVERN- 
MENT LEGAL  TENDER  NOTES  AND 
SILVER  COINAGE."  At  the  time  "the 
panic  circular"  was  issued,  the  people  had 
had  the  benefit  of  fifteen  years  experience 
since  the  enactment  of  the  Bland-Allison 
silver  coinage  act,  and  were  only  fairly 
beginning  to  realize  the  great  virtue  that 
would  flow  from  a  somewhat  more  plenti- 
ful supply  of  United  States  money. 

What  was  the  stimulus,  inducement  or  in- 
centive urged  upon  the  money  lenders  by  th^ 


THE  CURSE  OF  THE  GIANTS  53 

''panic  circular"  in  order  to  unite  their  ener- 
gies to  concerted  action  for  the  demonetizing 
of  silver? 

That  which  always  appeals  with  the 
greatest  effect  to  the  cupidity  of  "Shy- 
lock";  namely,  that  "this  will  require  the 
authorization  of  from  five  hundred  million 
($500,000,000)  to  one  billion  ($1,000,000,- 
000)  of  new  bonds  (therefore  more  bond- 
age, more  bond-servants)  as  a  basis  of  cir- 
culation." The  student  should  never  lose 
sight  of  the  fact  that  national  bank  notes 
are  based  on  a  national  debt;  and  that  a 
perpetual  national  debt,  perpetual  bond- 
age of  the  people,  if  not  the  ideal  condition 
of  society  desired  by  ALL  money  lenders, 
is  the  logical  sequence  at  least,  toward 
which  the  present  national  banking  system 
tends. 

If  people  were  satisfied  with  silver  coinage 
and  United  States  treasury  notes,  and  public 
sentiment  favorable  to  the  issue  of  more 
United  States  money  was  on  the  increase, 
how  could  the  national  banks  in  the  face  of 
these  circumstances  urge  that  United  States 
money  should  be  displaced  by  national  bank 
notes,  especially  considering  the  fact  that 
more  national  bank  notes  must  necessarily 
increase  the  public  debts  by  hundreds  of  mil- 
lions of  dollars? 


64  THE  CURSE  OF  THE  GIANTS 

By  no  argument  or  theory  compatible 
with  good  law  or  good  morals,  YET  NEV- 
ERTHELESS, pursuant  to  the  proclama- 
tion by  the  President  of  the  United  States, 
for  that  very  purpose,  CONGRESS  WAS 
CONVENED  IN  EXTRA  SESSION  THE 
FOLLOWING  AUGUST,  and  the  purchas- 
ing clause  of  the  Sherman  silver  coinage 
bill  was  repealed.  Never  during  the  en- 
tire history  of  the  Government  of  the 
United  States  has  there  been  another  such 
a  flagrant  object  lesson  of  the  evil  power 
of  concentrated  wealth,  aided  possibly,  or 
probably,  by  the  prince  of  the  power  of 
darkness,  to  control  the  destinies  of  men. 


CHAPTER  VII. 

UNITED  STATES  MONEY  VS.  BANK   NOTES. 

Gold  coin  is  United  States  money ;  and  the 
money  classes  seem  to  favor  Government  is- 
sue of  gold  coin.  How  can  that  fact  be  ex- 
plained? 

Conscious  as  the  bondholding  money 
lending  classes  certainly  are  of  their  power 
to  control  the  money  system,  they  have  not 
yet  arrived  at  the  point  where  they  have 
found  it  either  necessary  or  expedient  open- 
ly to  advocate  the  closing  of  the  United 
States  mints.    The  money  lending  classes, 


THE  CURSE  OF  THE  GIANTS  56 

however,  are  as  mucli  opposed  to  one  form 
of  United  States  money  as  another.  In 
the  language  of  "the  panic  circular"  NA- 
TIONAL BANK  NOTES  ON  A  GOLD 
BASIS  (meaning  a  bond  basis),  MUST  BE 
MADE  THE  ONLY  MONEY.  Gold  coin 
can  be,  and  frequently  is,  melted  into  gold 
bullion  without  changing  its  value;  and 
gold  bullion  is  no  part  of  the  medium  of 
exchange;  money.  Moreover,  the  bond- 
holders are  sanguine  of  their  ability  to  con- 
trol the  direction,  if  not  the  volume  of 
all  gold  coin  minted.  Hence  the  scarcity 
of  gold  coin  as  a  medium  of  exchange. 

Then  the  animosity  of  bankers  and  money 
lenders  generally  against  silver  coin  is  more 
because  of  its  being  United  States  money 
than  because  of  the  nature  of  the  metal ;  and 
the  reason  why  they  have  not  dishonored  and 
disparaged  gold  coin  at  the  same  time,  is 
mainly  or  entirely  a  consideration  of  ex- 
pediency.   Is  this  the  correct  understanding? 

That  is  the  correct  understanding.  The 
further  fact  also,  that  silver  has  heretofore 
been  found  in  greater  abundance  than  gold, 
incidentally  caused  the  opposition  to  con- 
centrate against  the  white  metal. 

What  are  the  evidences  that  the  supply  of 
United  States  money  as  a  medium  of  ex- 


56  THE  CURSE  OF  THE  GIANTS 

change  is  inadequate  to  the  needs   of  the 

people  ? 

First,  the  absence  of  it;  and  second,  the 
reports  of  the  director  of  the  United 
States  mint.  The  aggregate  value  of  the 
gold,  silver  and  copper  coined  at  all  the 
mints  of  the  United  States  since  the  first 
Government  mint  was  established,  in  1792, 
np  to  Jannarv  first,  1906,  a  period  of  114 
years,  is  $3,637,350,966.28.  Much  of  this, 
probably  more  than  one-half,  has  been  lost, 
destroyed,  buried  in  the  earth  or  melted  in- 
to bullion.  The  capitalization  of  the  rail- 
road corporations  transacting  business  in 
the  state  of  Pennsylvania,  stocks  and  bonds 
on  which  the  people  are  taxed  to  pay  in- 
terest and  dividends,  is  $4,304,880,297,  ex- 
ceeding the  value  of  all  coin  of  every 
description  and  denomination  issued  by  the 
Government  from  first  to  last  by  more  than 
six  hundred  millions  of  dollars. 

What  consideration  other  than  the  aggre- 
gate value,  is  important  relating  to  the  me- 
dium of  exchange? 

The  denomination.  More  than  half  the 
total  value  of  all  the  coins  minted  in  the 
mints  of  the  United  States  are  of  a  denomi- 
nation seldom  seen  by  the  great  majority 
of  tlie  common  people,  namely  twenty  dol- 
lar gold  pieces.  Twenty  dollar  gold  pieces 
are  not  designed  for  general  circulation 


THE  CURSE  OF  THE  GIAis^TS  57 

among  the  common  people  and  the  coin- 
age of  one  dollar  gold  pieces,  the  gold  coin 
most  serviceable  as  a  circulating  medium, 
was  discontinued  many  years  ago.  The 
total  value  of  one  dollar  gold  pieces  minted 
from  first  to  last  is  less  than  three-fourths 
of  one  per  centum  of  the  total  coinage  of 
gold. 

Silver  being  unsuitable  for  coins  of  a  de- 
nomination greater  than  one  dollar,  did 
this  circumstance  make  that  metal  still  more 
objectionable  to  the  moneyed  classes! 

Yes.  Money  of  small  denominations  has 
always  been  unpopular  with  the  money 
lending  classes  and  therefore  their  wealth 
has  been  used  to  secure  legislation  favor- 
able to  their  interests.  Many  years  ago, 
before  the  present  national  banking  sys- 
tem was  established,  several  states,  notably 
New  York  and  Illinois,  enacted  laws  mak- 
ing the  issue  of  bills  of  a  lesser  denomina- 
tion than  five  dollars  or  ten  dollars  a  mis- 
demeanor punishable  by  fine  or  imprison- 
ment. National  banks  at  present  issue  no 
bills  of  a  denomination  less  than  five  dol- 
lars. The  only  paper  money  now  issued  in 
denominations  less  than  $5  is  one  dollar 
and  two  dollar  silver  certificates. 

Are  national  bank  bills  issued  in  denomina- 
tions so  large  as  to  practically  take  them  out 
of  circulation? 


58  THE  CURSE  OF  THE  GIANTS 

Yes.  Money  of  a  greater  denomination 
than  twenty  dollars  circulates  very  little 
comparatively.  The  denomination  of  na- 
tional bank  bills  greater  than  twenty  dol- 
lars are  $50  bills;  $100  bills;  $500  bills; 
$1,000  bills;  $5,000  bills  and  $10,000  bills. 

It  is  affirmed  that  there  has  never  been  a 
sufficient  supply  of  the  medium  of  exchange 
in  circulation.  What  indications  are  there 
that  it  is  true  at  least  of  the  present  genera- 
tion? 

First,  as  always,  the  absence  of  it ;  sec- 
ond, the  recent  universal  issue  of  "clear- 
ing house  certificates,"  and,  third,  admis- 
sions as  the  following  quoted  from  the 
financial  page  of  the  Washington  Post,  of 
July  31,  1907,  namely:  "A  well  known 
financier  declares  drastic  financial  legis- 
lation is  needed  to  expand  money  supply." 
"Business  easing  up,  a  natural  sequence 
to  the  scarcity  of  money."  "The  truth 
of  the  matter  is  there  is  not  sufficient  money 
for  legitimate  purposes."  "Business 
has  grown  too  fast  in  comparison  with  the 
growth  of  our  money  supply."  "There  is 
•  one  thing  certain — there  will  have  to  be 
some  drastic  financial  legislation  created 
for  the  purpose  of  expanding  our  money 
supply  before  the  vast  and  unlimited  re- 
sources of  the  country  can  be  developed  as 
they  should  be  developed." 


THE  CURSE  OF  THE  GIANTS  59 

What  ''drastic"  financial  legislation  is  now 
(1908)  proposed? 

More  national  bank  money,  which  means, 
as  always,  more  debt,  more  bonds  and 
more  human  bondage. 

^Yho  is  reported  to  have  said  that  ''fifty 
men  in  these  United  States  have  it  within 
their  power,  by  reason  of  the  wealth  which 
they  control,  to  come  together  within  24  hours 
and  arrive  at  an  imderstanding  by  which 
every  wheel  of  trade  and  commerce  may  be 
stopped  from  revolving,  every  avenue  of 
trade  blocked,  and  every  electric  key  struck 
dumb.  These  fifty  men  can  paralyze  the  whole 
country,  for  they  control  the  circulation  of  the 
currency  and  can  create  a  panic  whenever 
they  will"! 

United  States  Senator  Chauncey  M.  De- 
pew.  See  ' '  The  Coming  Battle, ' '  by  M.  W. 
Walbert,  1899,  page  357. 

"What  "get-rich-quick"  scheme  was  availed 

of  by  the  money  lenders  in  the  early  sixties  1 

The  opportunity  to  buy  United  States 
Government  bonds. 

How  much  profit  did  the  bondholders  real- 
ize on  the  United  States  bonds  they  pur- 


60  THE  CURSE  OF  THE  GIANTS 

chased  from  1862  to  1868,  inclusive,  includ- 
ing tlie  interest,  to  1875? 

More  than  one  billion  dollars. 

What  authority  can  be  cited  in  confirma- 
tion of  that  statement? 

See  page  260,  Congressional  Record,  45th 
Congress,  January  10th,  1878.  There  the 
figures  are  given  in  detail  year  by  year  and 
summed  up  in  words  and  figures  as  fol- 
lows: "An  account  of  the  bondholders' 
clear  profit  arising  from  NO  INVEST- 
MENT AT  ALL  may  therefore  be  stated 
in  the  following  tabular  form:" 

1862,  $  28,138,989 

1863,  94,555,713 

1864,  306,551,382 

1865,  110,159,367 

1866,  53,757,183 

1867,  156,915,741 

1868,  153,159,765 
On  account  of  5%  bonds,    109,297,864 


$1,012,536,004 

Compared  with  the  present  debt-creating 
epoch  which  began  in  1862,  with  the  inaugu- 
ration of  the  present  national  banking  sys- 
tem, what  was  the  financial  condition  of  the 
people  in  1836,  47  years  after  the  Constitu- 
tion of  the  United  States  was  adopted? 


THE  CURSE  OF  THE  GIANTS  61 

After  liquidating  tlie  expenses  and  debts 
incurred  as  the  result  of  two  wars,  the 
revolutionary  war  and  the  war  of  1812,  at 
the  close  of  the  year  1836  a  cash  surplus 
exceeding  42  millions  ($42,468,585)  had 
been  accumulated  in  the  national  treasury. 
What  disposition  was  made  of  this  surplus! 

Congress  ordered  its  distribution,  all 
save  five  million  dollars,  among  the  sev- 
eral states  (26  in  number  at  that  time),  ac- 
cording to  population,  as  a  substantial  evi- 
dence of  good  cheer,  a  sort  of  universal 
dividend  of  prosperity. 

"Was  this  surplus  actually  distributed 
among  the  states  as  ordered  by  Congress? 

Three  installments  amounting  in  the  ag- 
gregate to  $28,101,644  were  actually  dis- 
tributed, but  the  fourth  quarterly  install- 
ment was  never  distributed.  Congress  in 
the  meantime  having  rescinded  its  former 
order. 

What  act  is  made  by  statute  law  an  offense 
as  sure  (or  possibly  more  sure)  to  meet  with 
swift  and  merciless  punishment  as  the  crime 
of  taking  human  life? 

The  act  of  issuing  unauthorized  money. 
At  the  advent  of  the  nineteenth  century  to 
counterfeit  the  bills  of  credit  of  the  State 
of  New  York  was  punishable  by  branding 


62  THE  CURSE  OF  THE  GIANTS 

the  letter  ''C"  with  a  hot  iron  on  the  cheek 
of  the  offender. 

Does  the  goldsmith  who  converts  twenty- 
dollar  gold  pieces  or  other  United  States 
coins  into  articles  of  merchandise,  such  as 
finger  rings,  watch  cases,  etc.,  violate  any 
law,  organic  or  statutory? 

No.  That  is  a  most  common  practice. 
Many  millions  of  dollars  of  United  States 
money  is  thus  taken  out  of  circulation  and 
the  medium  of  exchange,  the  circulating 
medium  thereby  made  scarce,  and  there 
are  no  laws  on  the  statute  books  making 
the  custom  a  punishable  offense. 

What  effect  on  trade  and  commerce  does 
the  practice  of  contracting  the  supply  of 
money — the  circulating  medium,  or  medium 
of  exchange  have? 

To  make  money  scarce  is  to  make  money 
dear;  therefore  harder  to  obtain.  Hence 
people  are  compelled  to  give  more  value 
in  labor  or  the  products  of  labor  to  obtain 
a  dollar  or  a  given  number  of  dollars.  To 
make  money  scarce  is  to  make  the  pajonent 
of  debts  more  difficult,  or  in  some  cases 
absolutely  impossible. 

Give  a  demonstration  of  this  last  proposi- 
tion. 


THE  CURSE  OF  THE  GIANTS  63 

John  D.  Eockefeller  and  Jolin  Pierpont 
Morgan  together  hold  mortgages  amount- 
ing to  one  hundred  millions  of  dollars  on 
real  property  valued  at  say  two  hundred 
millions.  They  quietly  issue  orders  to  the 
banks  they  own  or  control  (which  may  be 
directly  or  indirectly  nearly  or  quite  all  the 
banks  of  the  United  States),  to  *' retire  at 
once  one-third  of  their  circulation  and  call 
in  one-half  of  their  loans"  to  ''make  a 
monetary  stringency  felt. ' '  Then  they  melt 
perhaps  fifty  million  dollars  of  United 
States  gold  coin  into  gold  bullion  and 
through  their  influence  suspend  for  a  time 
the  operations  of  the  United  States  mints. 
People  find  it  not  only  difficult  but  in  some 
cases  impossible  to  pay  their  debts,  there 
being  little  or  no  money  in  circulation. 
Morgan  and  Rockefeller  foreclose  their 
mortgages  and  become  owner  in  fee  simple 
of  millions  of  dollars  for  which  they  have 
rendered  no  equivalent  in  labor  or  the  prod- 
ucts of  labor. 

Ethically  considered,  then,  is  it  a  crime  to 
curtail  the  supply  of  money,  the  medium  of 
exchange,  whether  so  defined  by  human  laws 
or  otherwise? 

It  certainly  is. 

Suppose  a  goldsmith  or  any  other  person 
were  to  take  gold  bullion,  gold  finger  rings, 


64  THE  CURSE  OF  THE  GIANTS 

watcli  cases,  etc.,  or  even  some  base  or  com- 
mon metal  like  lead  or  almninum,  and  by 
chemical  process  or  otherwise  convert  the 
same  into  United  States  gold  coin,  the  same 
being  exact  duplicates  in  every  particular  to 

coins  issued  at  the  United  States  mints,  so 
perfect  that  no  expert  could  distinguish  the 
authorized  money  from  the  unauthorized, 
'vhat  would  be  the  result? 

The  result  would  be  that  the  individual 
so  operating  would  be  imprisoned  as  an  of- 
fender against  the  laws  of  the  United 
States. 

What  man,  woman  or  child  could  justly 
claim  that  they  had  been  injured  by  such 
an  operation!  Or  who  could  possibly  be  in- 
jured by  the  free  coinage  of  silver  or  gold 
at  the  mints  of  the  United  States  ? 

It  might  be  well  for  the  student  to  re- 
peat this  question  several  times  to  himself 
and  then  apply  such  an  answer  as  to  him 
might  seem  most  proper. 
Considering  that  the  American  people  are 
sober,  intelligent,  industrious,  liberty  loving 
and  peaceable,  how  can  the  fact  be  explained 
that  they  have  become  so  lio]pelessly  over- 
whelmed with  public  debts? 

Only  in  the  one  way  it  has  been  ex- 


THE  CURSE  OF  THE  GIANTS  65 

plained,  namely  by  tolerating  the  worst  pos- 
sible monetary  system  that  human  ingenu- 
ity, aided  by  the  prince  of  the  power  of 
darkness,  could  devise. 

If  the  aggregate  of  public  debts  is  so  great 
that  they  can  never  be  paid  will  not  the  bond- 
holders be  the  losers  in  the  end? 

If  they  get  all  the  products  of  labor  to 
pay  the  interest  and  dividends  on  their  in- 
vestments, their  stocks  and  bonds,  they  can- 
not and  do  not  ask  or  exi)ect  anything  more 
and  they  will  never  be  satisfied  with  any- 
thing less.  All  they  can  possibly  hope  for 
is  to  reduce  the  industrial  classes  to  a  con- 
dition of  hopeless  bond-servants. 

Is  it  the  deliberate  intention  then  of  the 
money  lending  classes  to  keep  the  people  in 
perpetual  bondage? 

Yes.  It  is  their  hope  and  expectation  to 
establish  permanently  a  government  in 
which  the  common  people,  the  industrial 
classes,  will  be  kept  in  a  condition  of  per- 
petual servitude.  They  expect  to  so  con- 
trol wages,  and  wage  earners,  that  the 
money  value  of  all  products  will  be  ab- 
sorbed in  the  payment  of  interest,  rent, 
taxes  and  profits.  It  would  be  manifestly 
impossible  to  realize  more  than  all.  and  less 
than  aU  will  not  satisfy.  Hence  the  money 
loaners  are  never  alarmed  in  the  least  at 


66  THE  CURSE  OP  THE  GIANTS 

the  amazing  and  constantly  increasing  ag- 
gregation of  public  debts.  It  is  only  when 
the  interest  payers  begin  to  enquire  what 
they  must  do  to  be  saved,  that  the  bond- 
holders become  alarmed. 

Was  this  proposition  illustrated  by  the  op- 
ponents of  free  silver  coinage? 

Yes.  When  it  was  proposed  to  increase 
the  supply  of  silver  dollars,  the  money  that 
money  lenders  cannot  completely  control, 
and  which,  unlike  bank  notes,  are  not 
founded  upon  a  national  debt,  the  bond- 
holders and  moneyed  classes  generally 
cried  "repudiation."  No  monetary  sys- 
tem that  can  be  devised  which  will  admit 
of  the  slightest  possibility  of  reducing  the 
enormous  volume  of  public  debts  or  even 
reduce  the  usury  which  they  expect  to  wring 
from  the  toil  of  the  producers,  will  ever  be 
satisfactory  to  the  bondholders. 

What  did  the  Chicago  Tribune  say  concern- 
ing public  debts,  January  10,  78? 

''There  is  no  disposition  in  any  quar- 
ter," said  the  Tribune,  "to  deny  the  enor- 
mous increase  of  public  debts,  the  corrupt 
operations  and  the  organized  system  of 
plunder  practiced  by  city  rings  from 
Tweed's  down,  or  the  startling  fact  that 
the  cities  thus  heavily  mortgaged  can  show 
no  substantial  equivalent  for  their  debts. 


THE  CURSE  OF  THE  GIANTS  67 

The  money  HAS  BEEN  CRIMINALLY 
WASTED,  squandered  upon  rings,  eaten 
up  in  contracts,  divided  among  officials, 
flung  away  upon  experiments  and  useless 
improvements — in  plain  language,  the  debts 
represent  public  plunder,  and  what  have 
the  cities  to  show  for  it!  Nothing  but  bad- 
ly paved  streets;  illy  constructed  public 
buildings ;  vast  parks  the  very  shade  trees 
of  which  have  indelibly  stamped  upon  them 
the  word  'steal';  railway  adventures  that 
have  proved  a  damage  rather  than  a  ben- 
efit; gas  rings  whose  only  objects  seem  to 
be  plunder;  and  city  officials  whose  only 
object  seems  to  be  to  play  into  the  hands 
of  the  bummer  element  with  a  view  to  next 
spring's  election." 

"What  did  the  venerable  Peter  Cooper  write 
in  1876  when  a  candidate  of  the  Greenback 
party  for  President  of  the  United  States? 

Peter  Cooper,  one  of  the  most  wealthy 
and  honored  men  of  New  York  city  in  his 
day,  wrote  for  publication  these  indisput- 
able truths:  ''An  increase  in  the  volume 
of  money,"  said  Mr.  Cooper,  "is  the  only 
remedy  for  our  present  grievances.  Debts 
with  inconvertible  property  are  every- 
where, while  monopolists  and  non-produc- 
ers hold  all  the  money,  A  debt  of  one  thou- 
sand dollars  will,  and  often  does,  take  by 
force  from  the  debtor,  a  farm,  a  house,  or 


68  THE  CURSE  OF  THE  GIANTS 

other  property  that  has  cost  the  owner  ten 
thousand  dollars.  Debt,  debt  is  every- 
where and  can  be  paid  only  in  money.  It 
has  been  incurred  by  states,  cities,  coun- 
ties, towns,  villages,  corporations  and  in- 
dividuals to  an  amount  that  is  fearful  to 
contemplate." 

In  the  forties  and  the  fifties  men  now  the 
fathers  of  later  generations  were  taught  in 
the  public  schools  that  Americans  were  free 
men.  Was  such  teaching  true  then,  or  is  it 
true  now? 

Let  that  question  be  answered  in  true 
Yankee  style,  that  is,  by  asking  another 
question,  or  several  other  questions.  Can 
a  people  burdened  by  scores  of  billions  of 
debts  claim  to  be  a  free  people?  In  theory 
the  American  people  are  supposed  to  orig- 
inate and  carry  into  effect  the  American 
system  of  jurisprudence.  In  fact  the  Amer- 
ican mechanic,  farmer  or  ordinary  business 
man  has  about  the  same  opportunity  to 
originate  the  laws  of  the  American  Repub- 
lic that  he  has  to  assist  in  framing  the  laws 
of  the  British  Empire. 

If  the  American  people  are  NOT  destined 
to  remain  in  a  condition  as  bond-servants, 
chattel  slaves,  how  is  that  consummation  to 
be  avoided"? 


THE  CURSE  OF  THE  GIA^'TS  69 

It  is  essential,  first  of  all,  to  fully  com- 
prehend the  extent  of  the  evil.  Present 
conditions  are  intolerable ;  they  cannot  pos- 
sibly continue.  The  fact  that  ''all  men  are 
endowed  with  certain  inalienable  rights," 
the  "right  of  life,  liberty  and  the  pursuit 
of  happiness,"  having  been  instilled  into 
the  moral  fibre  of  the  nation,  the  American 
people  will  not  continue  to  endure  the 
"yoke  of  bondage." 


CHAPTER  VIII. 

CONCLUSION. 

Name  five  measures  the  adoption  of  which 
would  tend  to  ameliorate  the  present  intol- 
erable conditions. 

First.  A  system  of  three-cent  street  car 
fares  in  all  the  large  cities  similar  to  the 
system  now  established  in  the  city  of  Cleve- 
land, Ohio,  includmg  three-cent  aluminum 
dies,  representing  coins,  which  pass  cur- 
rent as  a  medium  of  exchange  for  minor 
purchases,  and  save  the  making  of  change 
in  paying  street  car  fares. 

Second.  A  very  material  increase  in  the 
supply  of  United  States  money,  including 
the  free  and  unrestricted  coinage  of  silver ; 
and  also,  the  issue  of  a  medium  of  ex- 
change (paper)  based  on  land  values,  the 


70  THE  CURSE  OF  THE  GIANTS 

denomination  to  be  not  greater  .than  one 
dollar. 

Third.  Abolish  all  laws  imposing  taxes 
or  license  fees  for  the  sale  of  spirituous 
and  malt  liquors. 

Fourth.  Enact  a  federal  statute  impos- 
ing a  tax  on  the  transfer  of  all  real  and 
personal  property  at  death,  by  which  a  very 
large  share  of  the  public  revenues  shall  be 
collected  and  distributed,  the  state,  na- 
tional and  county  governments  sharing  in 
the  distribution. 

Fifth.  Abolish  all  other  laws,  state  and 
federal,  for  the  collection  of  taxes  and  li- 
cense fees  and  collect  all  public  revenues 
from  inheritance  taxes  and  a  tax  on  land 
values  until  such  time  as  it  may  appear 
that  all  public  revenue  should  be  collected 
exclusively  on  land  values. 

Would  not  a  large  increase  in  the  sale  of 
intoxicating  drinks  follow  the  repeal  of  li- 
cense laws  as  a  natural  consequence! 

No ;  it  would  greatly  simplify  the  saloon 
problem.  People  are  not  deterred  from 
engaging  in  the  liquor  traffic  by  the  cost  of 
the  license.  To  abolish  the  saloon  license 
would  be  to  eliminate  the  saloon  as  a  po- 
litical factor  and  greatly  purify  the  entire 
elective  system. 

What  mercantile  system  might  be  and  prob- 


THE  CURSE  OF  THE  GIANTS  71 

ably  will  be  established  to  the  great  benefit 
of  all  classes  and  conditions  of  people? 

A  system  of  exchanging  commodities 
(buying  and  selling  merchandise  of  every 
description)  by  which  system  the  full  value 
of  the  labor  of  each  individual  will  be  per- 
petuated, and  a  system  of  buying  and  sell- 
ing real  estate  known  as  the  twentieth  cen- 
tury system. 

What  is  the  one  condition  that  must  neces- 
sarily be  changed  before  a  peaceful  and  per- 
manent condition  of  human  society  can  be 
set  up? 

The  condition  of  human  slavery.  There 
is  neither  wisdom  nor  justice  in  the  doc- 
trine of  perpetual  debts.  A  national  debt 
is  not  a  national  blessing;  it  is  a  national 
curse.  Let  all  the  money  be  issued  by  the 
government.  Reduce  the  rates  of  trans- 
portation for  both  freight  and  passengers 
to  a  reasonable  return  on  money  actually 
invested.  To  do  this  it  may  be  necessary 
for  the  government  to  own  and  operate  the 
railroads. 


72  THE  CURSE  OF  THE  GIANTS 


Political  Reminisences. 


Silver  dollars  coined  at  the  United  States 
mints  were  legal  tender  money  from  the  time 
the  mints  were  established  in  1792,  down  to 
1873,  when  silver  was.  demonetized  by  an  act 
of  Congress  at  the  instigation  of  British 
capitalists  without  even  the  knowledge  of  the 
Senators  and  Representatives  whose  votes 
consummated  the  infamy.  Five  years  later, 
after  'Hhe  crime  of  1873"  had  been  dis- 
covered, an  irresistible  demand  for  the  re- 
enactment  of  a  law  providing  for  the  coinage 
of  silver  dollars  resulted  in  the  passage  of 
the  Bland-Allison  silver  bill  on  the  28th  of 
February,  1878.  President  Hayes,  was  ex- 
pected to  veto  the  bill  and  did  so,  yielding  to 
the  pressure  of  "those  who  live  by  gambling 
in  money  and  public  securities."  However, 
in  record  breaking  time  Congress  passed  the 
bill  over  the  President's  veto. 

Prominent  among  those  who  worked  zeal- 
ously for  the  success  of  the  Bland- Allison  law 
was  the  late  President  William  McKinley, 


THE  CURSE  OF  THE  GIANTS        73 

who  at  that  time  was  a  representative  from 
Ohio  in  the  45th  Congress. 

The  Bland- Allison  silver  law  was  a  move 
in  the  right  direction  yet  it  was  never  as 
potent  for  good  as  it  would  have  been  if  it 
could  have  been  passed  in  its  original  form. 
The  advocates  of  "the  gold  party"  succeed- 
ed in  very  seriously  crippling  it.  As  finally 
passed,  however,  it  provided  at  least  a  limited 
but  steady  increase  of  the  circulating  medium 
very  much  to  the  benefit  of  trade  and  com- 
merce. It  provided  for  the  coinage  of  not 
less  than  two  million  silver  dollars  a  month. 

THE  SHERMAN  SILVER  LAW. 

Twelve  years  later,  July  14th,  1890,  the 
Bland  bill  was  superseded  by  the  Sherman 
silver  law.  The  Sherman  silver  bill  was 
signed  by  the  late  President  Benjamin  Harri- 
son, who  was  not  always  the  willing  servant 
of  the  Wall  street  money  trust,  and  who,  in 
consequence,  was  defeated  when  a  candidate 
for  reelection  in  1892. 

The  Sherman  law  of  1890  provided  for  the 
coinage  of  at  least  30  million  silver  dollars 
annually  in  excess  of  the  law  of  1878.  The 
late  President  McKinley  was  still  a  repre- 
sentative from  Ohio  when  the  Sherman  bill 


74  THE  CURSE  OF  THE  GIANTS 

was  pending  in  Congress.  To  his  credit  be  it 
said  that  Mr.  McKinley  labored  as  zealously 
for  the  Sherman  bill  as  he  had  labored  for 
the  Bland  bill  twelve  years  before.  Plead- 
ing for  its  passage  on  the  floor  of  the  House 
of  Representatives  June  7th,  1890,  Mr.  Mc- 
Kinley said:  ''It  has  been  made  clear  by 
this  discussion  that  it  is  desirable  and  neces- 
sary that  the  country  should  have  an  increase 
of  its  circulating  medium."  He  said  further 
(see  page  5812  of  the  Congressional  Record, 
1890),  "should  this  bill  fail  to  become  a  law, 
it  would  deprive  my  country  and  my  people 
and  the  laborers,  and  the  producers,  and  the 
industries  of  my  country  of  $30,000,000  an- 
nually of  the  circulating,  medium,  and  that 
no  man  should  hesitate  between  the  $2,000,000 
a  month  that  we  now  have  and  the  $4,500,000 
a  month  that  we  shall  have  under  the  pro- 
posed law." 

After  the  passage  of  the  Sherman  law  and 
while  again  a  candidate  for  reelection  to  Con- 
gress in  1890,  Mr.  McKinley  said:  *'I  am  in 
favor  of  the  use  of  all  the  silver  product  of 
the  United  States  for  money  as  a  circulating 
medium ;  I  would  have  silver  and  gold  alike. ' ' 

Mr.  McKinley  delivered  an  address  before 
the  State  League  of  Republican   Clubs  at 


THE  CURSE  OF  THE  GIANTS  75 

Toledo,  Olilo,  February  12tli,  1891,  when  lie 
took  occasion  to  upbraid  President  Cleveland 
for  ''his  servitude  to  the  gold  party." 
"During  all  these  years  at  the  head  of  the 
Government,"  said  Mr.  McKinley,  "Mr. 
Cleveland  was  dishonoring  one  of  the  precious 
metals,  one  of  our  great  products,  discredit- 
ing silver  and  enhancing  the  price  of  gold. 
He  even  endeavored  to  stop  the  coinage  of 
silver  dollars  before  his  inauguration  to  of- 
fice, and  afterwards,  and  to  the  end  of  his  ad- 
ministration, persistently  used  his  power  to 
that  end.  He  determined  to  contract  the  cir- 
culating medium;  to  demonetize  one  of  the 
coins  of  commerce;  limit  the  volume  of 
money  among  the  people ;  make  it  scarce  and 
therefore  dear." 

THE     SHERMAN    SILVER    LAW    RE- 
PEALED. 

All  that  Mr.  McKinley  had  said  about  Mr. 
Cleveland  discrediting  silver  and  enhancing 
the  price  of  gold  was  true.  At  the  very  time 
when  Mr.  McKinley  was  protesting  to  the  Re- 
publican Clubs  of  Ohio  in  1891,  against  Mr. 
Cleveland's  "servitude  to  the  gold  party," 
the  bondholders  had  already  decreed  that  Mr. 
Cleveland  should  again  be  ' '  their  representa- 


76  THE  CURSE  OF  THE  GIANTS 

live  in  the  "White  House."  More  than  that, 
IT  WAS  ALREADY  DECREED  THAT 
THE  COINAGE  OF  SILVER  DOLLARS 
SHOULD  BE  STOPPED  AGAIN  AT  ANY 
AND  ALL  COSTS.  Wall  street,  that  "sys- 
tem" which  "controls  legislation  by  control- 
ling the  currency, ' '  and  by  controlling  wages 
controls  wage  earners  (see  Hazzard  cir- 
cular), had  planned  one  more  desperate  and 
determined  effort  to  demonetize  silver  for- 
ever. To  that  end  Grover  Cleveland  was 
made  President  in  1892.  March  4th,  1893, 
he  was  inaugurated,  and  three  months  later 
his  "proclamation"  was  issued  convening 
Congress  in  extra  session  for  the  expressed 
purpose  of  curtailing  the  circulating  medium 
many  millions  of  dollars  by  the  "unct>ndi- 
tional  repeal"  of  the  Sherman  silver  bill 
which  had  not  yet  been  on  the  s.tatute  books 
three  full  years.  The  benefits  that  Mr.  Mc- 
Kinley  had  labored  for  so  zealously  were 
ruthlessly  sweiDt  away  at  the  behest  of  "the 
gold  party." 

The  diebate  in  the  Senate  of  the  United 
States  on  this  all  important  issue  continued 
from  August  7th  to  October  30'th,  when  the 
infamy  was  completed.  Senator  Stewart  of 
Nevada,  in  his  final  remarks  in  opposition  to 


THE  CURSE  OF  THE  GIANTS  77 

the  repealing  act  said :  ''The  die  is  cast.  The 
surreptitious  and  fraudulent  act  of  1873  de- 
monetizing silver  is  ratified  and  confirmed. 
The  gold  kings  are  victorious.  The  allied 
jDower  of  bonds  and  national  banks  has  won 
a  great  victory.  The  Trojan  horse  of  the 
gold  kings,  bedecked  with  flaming  banners 
upon  which  were  inscribed  'Democracy,' 
'Bimetalism,'  'Local  self-government,'  'Ke- 
cluction  of  Taxation,'  and  'Civil  Service  Re- 
form,' to  conceal  the  monometalic  guns  of 
concentrated  money  and  bonds,  made  a 
triumphant  entrance  into  the  national  capitol. 
Jeffersonian  and  Jacksonian  democrats  re- 
tired with  shame,  while  the  Hessians,  re- 
cruited for  plunder  and  spoils,  feasted  and 
made  merry  at  the  national  banquet  and 
swore  allegiance  to  the  profit  of  Wall  street. 
The  people  of  the  United  States  must  now 
grapple  with  the  most  dangerous,  the  most 
insidious,  and  the  most  relentless  foe  with 
which  humanity  is  compelled  to  contend — the 
power  of  concentrated  capital.  It  is  the  most 
dangerous,  because  its  weapons  are  cunning; 
the  most  insidious,  because  its  methods  are 
secret;  and  the  most  relentless,  because  it  is 
soulless  and  deaf  to  the  groans  of  its  vic- 
tims. ' ' 


78  THE  CURSE  OF  THE  GIANTS 

One  hundred  and  eight  Kepresentatives  and 
thirty-two  Senators,  however,  voted  against 
the  repealing  act,  some  of  whom  are  still  in 
public  life,  notably  the  Hon.  Joseph  G.  Can- 
non, of  Danville,  Illinois.  Every  principle  of 
justice,  liberty  and  equality,  every  principle 
of  representative  government  which  the 
American  people  hold  dear,  was  inextricably 
involved  in  the  fate  of  the  Sherman  silver 
coinage  law  of  1890.  But  thanks  to  the  money 
trust  of  Wall  street,  aided  by  their  faithful 
' '  representative  in  the  White  House, ' '  silver 
was  again  demonetized,  not  surreptitiously, 
as  in  1873,  but  by  virtue  of  an  extra  session 
of  Congress  convened  for  that  very  purpose 
by  the  President  of  the  United  States,  at  a 
time  when  it  was  admitted  that  there  was 
''AN  INCREASING  SENTIMENT  IN  FA- 
VOR OF  GOVERNMENT  LEGAL  TEN- 
DER NOTES  AND  SILVER  COINAGE. '» 

It  was  simply  a  question  of  more  money 
or  more  debt,  and  those  who  live  "by  gam- 
bling in  money  and  public  securities,"  by 
virtue  of  the  power  of  concentrated  ill-gained 
wealth  again  scored  for  more  debt.  The 
memory  of  those  who  voted  against  the  in- 
iquity for  which  the  53rd  Congress  was  in 
extra  session  convened,  are  entitled  to  the 


THE  CURSE  OF  THE  GIANTS  79 

same  meed  of  veneration  as  the  patriots  who 
bared  their  breasts  to  the  foes  of  popular 
government  in  the  war  for  the  Union,  1861- 
1865.  Their  names  and  post  office  addresses 
as  they  appear  in  the  Congresional  Record 
will  be  found  printed  in  an  appendix  to  this 
booklet. 

THE    PRESIDENTIAL    ELECTION    OF 

1892. 

The  presidential  election  of  1892  with  the 
single  exception  of  that  of  1904,  was  the  most 
indifferent  and  apathetic  presidential  elec- 
tion known  in  the  history  of  American  pol- 
itics. In  the  light  of  subsequent  events,  the 
reason  is  as  plain  as  a  pike-staff.  Mr.  Cleve- 
land was  elected  in  1892  by  the  ''still  hunt'* 
method.  Had  the  republican  party  in  1892 
adopted  a  platform  advocating  the  free  coin- 
age of  silver  at  the  legal  ratio  of  16  to  1,  and 
waged  a  vigorous  campaign  for  that  policy 
in  the  Congressional  districts,  Mr.  Harrison 
would  have  been  triumphantly  elected.  In 
all  the  history  of  American  politics  no  polit- 
ical party  was  ever  favored  with  such  a 
golden  or  at  least  such  a  silver  opportunity 
to  appeal  with  success  to  the  people  in  be- 


80  THE  CUESE  OF  THE  GIANTS 

half  of  a  popular  and  righteous  cause  as  that 
offered  to  the  republicans  in  1892. 

THE  SAME  ISSUE  NOW. 

In  the  last  analysis  of  all  political  issues 
the  question  of  more  money  or  less  money 
is  involved.  The  issue  paramount  to  all  polit- 
ical issues  at  the  present  time,  and  it  is  a 
moral  as  well  as  political  issue,  is  this: 
SHALL  THEEE  BE  MORE  MONEY, 
MORE  OF  THE  MEDIUM  OF  EX- 
CHANGE, OR  SHALL  THERE  BE  MORE 
PUBLIC  DEBTS,  MORE  BONDS! 

More  debt  means  more  bonds  and  human 
bondage,  more  poverty,  more  degradation, 
more  force,  more  crime,  more  lawlessness, 
more  strikes,  more  police,  more  war,  more  in- 
sanity and  more  suicides.  These  conditions 
abound  more  at  the  present  time  than  at  any 
other  period  of  history  because  the  people 
are  driven  to  the  extreme  of  desperation  by 
overwhelming  debt  and  its  concomitant  evils. 

The  late  President  McKinley  was  right 
when  he  declared  on  the  floor  of  the  House 
of  Representatives  18  years  ago,  that  a  much 
larger  volume  of  money,  the  circulating  me- 
dium, should  be  put  in  circulation.  IN  ALL 
THE  HISTORY  OF  THE  GOVERNMENT 


THE  CURSE  OF  THE  GIA^s^TS  81 

OF  THE  UNITED  STATES  THERE  HAS 
NEVER  YET  BEEN  A  TIME  WHEN 
THE  VOLUME  OF  MONEY  (UNITED 
STATES  MONEY)  WAS  ADEQUATE  TO 
THE  NEEDS  OF  LEGITIMATE  TRADE 
AND  COMMERCE ;  THE  GENERAL  WEL- 
FARE OF  ALL  THE  PEOPLE. 

THREE  INFAMOUS  CIRCULARS. 

In  July,  1862,  the  famous  or  infamous 
''Hazzard  circular"  was  judiciously  distrib- 
uted among  the  aristocratic  classes  and  pro- 
fessional money  lenders  in  general  both  in 
Europe  and  America.  It  was  written  by  an 
agent  of  London  capitalists  and  couched  in 
language  as  follows: 

' '  Slavery  is  likely  to  be  abolished  by  the 
war  power,  and  chattel  slaveiy  destroyed. 
This,  I  and  my  European  friends  are  in 
favor  of,  for  slavery  is  but  the  owning  of 
labor  and  carries  with  it  the  care  of  the  la- 
borers, while  the  European  plan  led  on  by 
England,  is  that  capital  shall  control  labor 
by  controlling  wages.  THIS  CAN  BE 
DONE  BY  CONTROLLING  THE 
MONEY.  THE  GREAT  DEBT  THAT 
CAPITALISTS  WILL  SEE  TO  IT 
IS  MADE  OUT  OF  THE  WAR  MUST 
BE  USED  AS  A  MEANS  TO  CONTROL 
THE  VOLUME  OF  MONEY.    To  accom- 


82  THE  CURSE  OF  THE  GIANTS 

plish  this,  THE  BONDS  MUST  BE  USED 
AS  A  BANKING  BASIS.  We  are  now 
WAITING  FOE  THE  SECEETAEY  OF 
THE  TEEASUEY  TO  MAKE  THIS 
EECOMMENDATION  TO  CONGEESS. 
IT  WILL  NOT  DO  TO  ALLOW  THE 
GEEENBACK,  AS  IT  IS  CALLED,  TO 
CIECULATE  AS  MONEY  ANY 
LENGTH  OF  TIME,  AS  WE  CANNOT 
CONTEOL  THAT.  BUT  WE  CAN  CON- 
TEOL  THE  BONDS,  AND  THEOUGH 
THEM  THE  BANK  ISSUES." 

Fifteen  years  later,  in  October,  1877,  a  cir- 
cular letter  was  issued  to  national  bankers 
in  every  state  of  the  Union  by  the  associated 
bankers  of  New  York,  Boston  and  Philadel- 
phia, signed  by  James  Buell,  Secretary,  247 
Broadway,  N.  Y.  That  circular  has  since 
been  known  in  financial  history  as  the  ''Buell 
Circular."  It  was  written  in  these  words: 

"Dear  Sir: — It  is  advisable  to  do  all  in 
your  power  to  sustain  such  prominent  daily 
and  weekly  newspapers,  especially  the  ag- 
ricultural and  religious  press,  AS  WILL 
OPPOSE  THE  ISSUE  OF  GEEENBACK 
PAPEE  MONEY,  and  that  you  also 
WITHHOLD  PATEONAGE  OE  FA- 
VOES  FEOM  ALL  APPLICANTS  WHO 
AEE  NOT  WILLING  TO  OPPOSE  THE 
GOVEENMENT  ISSUE  OF  MONEY. 
Let  the  Government  issue  the  coin  and  the 


THE  CURSE  OF  THE  GIANTS  83 

banks  issue  the  paper  money  of  the  conn- 
try,  for  THEN  WE  CAN  BETTER  PRO- 
TECT EACH  OTHER.  To  repeal  the  law 
creating  national  bank  notes,  or  to  restore 
to  circulation  the  Government  issue  of 
money,  WILL  BE  TO  PROVIDE  THE 
PEOPLE  WITH  MONEY,  AND  WILL, 
THEREFORE,  SERIOUSLY  AFFECT 
YOUR  INDIVIDUAL  PROFIT  AS 
BANKERS  AND  LENDERS.  SEE 
YOUR  CONGRESSMAN  AT  ONCE,  AND 
ENGAGE  HIM  TO  SUPPORT  OUR  IN- 
TERESTS THAT  WE  MAY  CONTROL 
LEGISLATION." 

Wlien  legislation  cannot  be  secured  by  fair 
and  honorable  means,  by  appealing  openly 
and  honestly  to  the  people,  it  can  frequently 
be  secured  by  dishonorable  means.  There- 
fore ''the  gold  party"  consistent  with  their 
determination  to  curtail  the  supply  of  United 
States  money,  and  knowing  that  that  could 
not  be  accomplished  with  the  knowledge  and 
consent  of  the  people,  issued  the  famous 
''panic  circular"  of  1893.  This  circular  was 
deliberately  designed  to  create  a  distress- 
ing and  blighting  financial  panic,  and,  of 
course,  it  had  the  desired  effect.  Doubtless 
thousands  of  people,  honest  but  misguided 
and   misinformed,   really  believed   that   the 


84  THE  CURSE  OF  THE  GIANTS 

business  depression  which  was  created  by  the 
money  trust  immediately  after  the  presi- 
dential election  of  1892,  was  caused  in  some 
mysterious  and  unaccountable  manner  by  an 
oversupply  of  United  States  money.  ''The 
panic  circular"  was  issued  March  12,  1893, 
just  one  week  after  Mr.  Cleveland  was  in- 
augurated. It  appealed  to  the  bondholding 
classes  generally  to  ''advocate  an  extra  ses- 
sion of  Congress  for  the  repeal  'uncondition- 
ally' of  the  Sherman  silver  law."  It  was  is- 
sued directly  from  the  x\merican  Bankers  As- 
sociation and  addressed  to  all  national  banks 
throughout  the  United  States.  It  was  in  the 
following  exact  words : 

"Dear  Sir: — The  interests  of  national 
bankers  require  immediate  financial  legis- 
lation by  Congress.  Silver,  silver  certif- 
icates and  treasury  notes  must  be  retired 
and  national  bank  notes  upon  a  gold  basis 
made  the  onlv  monev.  This  will  require 
the  authorization  of  ^from  $500,000,0110  to 
$1,000,000,000  of  new  bonds  (debts),  as  a 
basis  of  circulation.  You  will  at  once  re- 
tire one-third  of  your  circulation  and  call 
in  one-half  of  vour  loans.  BE  CAREFUL 
TO  ]\rAKE  A  MONETARY  STRING- 
ENCY FELT  AMONG  YOUR  PATRONS, 
ESPECIALLY  AMONG  INFLUENTIAL 
BUSINESS  MEN.    ADVOCATE  AN  EX^ 


THE  CURSE  OF  THE  GIANTS  85 

TEA  SESSION  OF  CONGRESS  TO  RE- 
PEAL THE  PURCHASING  CLAUSE 
OF  THE  SHERMAN  LAW,  and  act  with 
other  banks  of  your  city  in  securing  a  large 
petition  to  Congress  for  its  unconditional 
repeal  per  accompanying  form.  USE 
PERSONAL  INFLUENCE  WITH  CON- 
GRESSMEN, AND  PARTICULARLY 
LET  YOUR  WISHES  BE  KNOWN  TO 
YOUR  SENATORS.  The  future  life  of 
national  banks  as  fixed  and  safe  invest- 
ments depends  upon  immediate  action,  as 
THERE  IS  AN  INCREASING  SENTI- 
MENT IN  FAVOR  OF  GOVERNMENT 
LEGAL  TENDER  NOTES  AND  SILVER 
COINAGE." 

Attention  is  again  called  to  the 'fact  that 
"the  gold  party"  were  well  aware  that  they 
were  deliberately  engaging  in  an  effort  to 
defeat  the  will  of  the  people,  and  admit  in  the 
closing  sentence  of  the  circular  that  there 
was  ''AN  INCREASING  SENTIMENT  IN 
FAVOR  OF  GOVERNMENT  LEGAL  TEN- 
DER NOTES  AND  SILVER  COINAGE." 

SILVER  DOLLARS,  GREENBACKS  AND 
GOVERNMENT  BONDS. 

How  to  raise  money  with  which  to  carry  on 
the  war  of  the  rebellion  was  the  problem  con- 
fronting President  Lincoln's  administration 


86  THE  CURSE  OF  THE  GIANTS 

in  the  early  sixties.  The  nation's  extremity 
was  the  capitalists'  opportunity  and  in  its 
emergency  the  Government  was  compelled  to 
issne  bonds  which  the  capitalists  were  eager 
to  purchase  paying  for  them  in  greenbacks. 
Under  one  pretext  or  another,  after  the  close 
of  the  war,  the  great  national  debt  was  re- 
newed, or  ''refunded."  That  is  to  say  the 
bonds  were  exchanged  for  bonds  of  which  the 
terms  and  conditions  were  made  different. 
Generally  speaking,  all  bonds  of  the  United 
States  referred  to  in  the  debates  in  Congress 
pertaining  to  the  remonetization  of  silver,  in 
1877  and  1878,  contained  the  proviso  that  they 
were  to  be  paid  in  ''coin"  of  the  stand- 
ard value  of  July  14, 1870.  They  were  word- 
ed as  follows: 

"The  United  States  of  America  are  in- 
debted to  the  bearer  in  the  sum  of  $50. 

"This  bond  is  issued  in  accordance  with 
the  provisions  of  an  act  of  Congress  en- 
titled 'an  act  to  authorize  the  refunding 
of  the  national  debt,'  approved  July  14, 
1870,  as  amended  by  an  act  approved  Jan- 
uary 20,  1871,  and  is  redeemable  at  the 
pleasure  of  the  United  States,  after  the 
first  day  of  July,  1907,  in  coin  of  the  stand- 
ard value  of  the  United  States  on  said 
July  14,  1870,  with  interest  in  such  coin 


THE  CURSE  OF  THE  GIANTS  87 

from  the  day  of  the  date  hereof  at  the  rate 
of  four  per  centum  per  annum,  payable 
quarterly,  on  the  first  day  of  October,  Jan- 
uary, iVpril,  and  July  in  each  year.  The 
principal  and  interest  are  exempt  from  the 
payment  of  all  taxes  or  duties  of  the  United 
States,  as  well  as  from  taxation  in  any 
form  by  or  under  any  state,  municipality 
or  local  authority." 

The  bondholders  set  up  the  claim  that  the 
word  ''coin"  as  expressed  in  the  bonds  was 
not  to  be  construed  in  its  ordinary  meaning 
but  that  the  bonds  were  really  payable  in 
''gold  coin  only."  With  just  as  much  reason 
they  might  have  claimed  they  were  to  be  paid 
in  silver  coin  only. 

JOHN  SHERMAN  AEGUES  THAT 
THE  GOVERNMENT  BONDS  SHOULD 
BE  PAID  IN  THE  SAME  KIND  OF 
MONEY  THE  GOVERNMENT  RE- 
CEIVED FOR  THEM,  NAMELY, 
GREENBACKS. 

(See  Congressional  Record,  December  14, 
1877,  page  204.) 

In   a  letter  dated  United   States   Senate 
Chamber,  Washington,  D.   C,  March  20th, 
1868,  addressed  to  Hon.  A.  Mann,  Jr.,  Brook- 
lyn Heights,  N.  Y.,  John  Sherman  says: 
"Dear  Sir: — I  was  pleased  to  receive 
your  letter.    My  personal  interests  are  the 


88  THE  CURSE  OF  THE  GIANTS 

same  as  yours,  but  like  you,  I  do  not  intend 
to  be  influenced  by  them.    IVly  construction 
of  the  law  is  the  result  of  careful  examina- 
tion, and  I  feel  quite  sure  an  impartial 
court  would  confirm  it,  if  the  case  could  be 
tried  before  a  court.    I  send  you  my  views 
as  fully  stated  in  a  speech.     Your  idea 
is  that  we  purpose  to  repudiate  or  violate 
a  promise  when  we  offer  to  redeem  'the 
principal'   in   legal   tender.     I   think   the 
bondholder  violates  his  promise  when  he 
refuses  to  take  the  same  kind  of  money  he 
paid  for  the  bonds.     If  the  case  is  to  be 
tested  by  the  law,  I  am  right;  if  it  is  to 
be  tested  by  Jay  Cook's  advertisements,  I 
am  wrong.     I  hate   repudiation   or   any- 
thing like  it,  but  we  ought  not  to  be  de- 
terred from  doing  what  is  right  by  fear  of 
undeserved  epithets.    If  under  the  law  as 
it  stands,  the  holders  of  the  five-twenties 
can  be  paid  in  gold,  then  we  are  repudiators 
if  we  propose  to  pay  otherwise.     If  the 
bondholder  can  legally  demand  only  the 
kind  of  money  he  paid,  then  HE  is  a  repu- 
diator  and  extortioner  to  demand  money 
more  valuable  than  he  gave. 

Truly  yours, 
(Signed)  John  Sherman." 

The  act  demonetizing  silver  was  passed  in 
the  closing  days  of  the  forty-second  Con- 
gress. It  was  entitled  ''An  act  revising  and 
amending  the  laws  relative  to  the  mints,  as- 


THE  CURSE  OF  THE  GIANTS        89 

say  offices  and  coinage  of  tlie  United  States.'* 
It  was  known  as  House  Bill  number  2934, 
and  signed  by  General  Grant,  then  President 
of  the  United  States,  February  12,  1873. 
That  General  Grant  did  not  even  suspect  that 
the  act  he  had  signed  destroyed  silver  as  one 
of  the  legal-tender  coins  is  proved  by  his  let- 
ter to  Mr.  Cowdrey,  dated  October  3,  1873, 
less  than  eight  months  after  he  had  signed 
the  demonetizing  act.  The  General  writes 
to  Mr.  Cowdrey  as  follows: 

* '  I  wonder  that  silver  is  not  already  com- 
ing into  the  market  to  supply  the  deficiency 
in  the  circulating  medium.  *  *  *  Ex- 
perience has  proved  that  it  takes  about 
$40,000,000  of  fractional  currency  to  make 
the  small  change  necessary  for  the  trans- 
action of  the  business  of  the  country.  Sil- 
ver will  gradually  take  the  place  of  this 
currency,  and,  further,  will  become  THE 
STANDARD  OF  VALUES,  which  will  be 
hoarded  in  a  small  wav.  I  estimate  that 
it  will  consume  from  $200,000,000  to  $300,- 
000,000  in  time  of  this  species  of  our  cir- 
culating medium.  *  *  *  j  confess  to  a 
desire  to  see  a  limited  hoarding  of  money, 
but  I  want  to  see  a  hoarding  of  something 
THAT  IS  A  STANDARD  OF  VALUE 
THE  WORLD  OVER.  SILVER  IS 
THIS. 

"Our  mines  are  now  producing  almost 


90  THE  CURSE  OF  THE  GIANTS 

unlimited  amoimts  of  silver  and  it  is  be- 
coming a  question,  what  shall  we  do  with 
it?  I  suggest  here  a  solution  which  will 
answer  for  some  years,  to  pnt  it  in  circu- 
lation, keeping  it  there  until  it  is  fixed,  and 
then  we  will  find  other  markets." 

For  evidence  that  the  Senators  and  Repre- 
sentatives in  Congress  whose  votes  legalized 
the  demonetizing  act,  like  the  President  who 
signed  the  act,  were  innocent  of  any  intention 
of  destroying  silver  as  a  monetary  coin,  see 
debates  in  Congress  at  the  extra  session  be- 
ginning October  15,  1877,  and  extending 
through  the  first  regular  session  of  the  same 
Congress  during  the  winter  of  1877-1878. 

OHIO  CALLS  FOR  RESTORATION. 

Three  years  after  the  demonetizing  act,  at 
its  session  in  1876,  the  General  Assembly  of 
the  State  of  Ohio  adopted  the  following  reso- 
lution : 

"Resolved  by  the  General  Assembly  of 
the  State  of  Ohio,  that  common  honesty  to 
the  taxpayers,  the  letter  and  the  spirit  of 
the  contract  under  which  the  great  body 
of  its  indebtedness  was  assumed  by  the 
United  States,  as  well  as  true  financial 
wisdom,  each  and  all,  demand  the  restora- 
tion of  the  silver  dollar  to  its  former  rank 
as  lawful  monev." 


THE  CURSE  OF  THE  GIANTS  91 

THE  SENATE  AND  HOUSE  OF  REP- 
RESENTATIVES REJECT  ALL  ARGU- 
MENTS AND  APPEALS  OF  THE  GOLD 
POWER  AND  DECLxVRE  THAT  NO 
VIOLATION  OF  THE  PUBLIC  FAITH 
OR  THE  RIGHTS  OF  THE  PUBLIC 
CREDITOR  IS  INVOLVED  IN  THE 
PAYMENT  OF  GOVERNMENT  BONDS 
IN  SILVER  DOLLARS. 

December  6,  1877,  the  following  resolution 
was  introduced  in  the  Senate  of  the  United 
States  and  passed  by  nearly  two-thirds  ma- 
jority after  eight  weeks  of  stubborn  opposi- 
tion by  '^the  gold  party."  The  vote  was 
taken  January  25,  1878,  three  days  before 
the  Bland  Silver  Bill  became  the  law  of  the 
land. 

•'Be  it  resolved  by  the  Senate  (the 
House  of  Representatives  concurring 
therein)  that  all  the  bonds  of  the  United 
States  issued  or  authorized  to  be  issued  un- 
der the  said  acts  of  Congress  hereinbefore 
recited  (the  acts  of  July  14,  1870,  and  Jan- 
uary 14,  1875)  are  payable,  principal  and 
interest,  at  the  option  of  the  Government 
of  the  United  States,  in  silver  dollars  of 
the  coinage  of  the  United  States,  contain- 
ing 4121/2  grains  each  of  standard  silver, 
and  that  to  restore  to  its  coinage  such  sil- 


92  THE  CURSE  OF  THE  GIANTS 

ver  coins  as  a  legal  tender  in  payment  of 
said  bonds,  principal  and  interest,  is  not 
in  violation  of  the  public  faith,  and  not  in 
derogation  of  the  rights  of  the  public 
creditor." 

The  same  resolution  was  passed  in  the 
House  of  Representatives  three  days  later, 
namely,  on  January  28,  1878. 

The  Bland  Silver  Bill  was  introduced  in 
the  House  of  Representatives  on  November 
5,  1877.  Tt  is  a  most  notable  circumstance 
that  this  bill  passed  the  House  on  the  same 
day  it  was  introduced.  It  was  amended  by 
the  Senate  and  finally  passed  that  body  as 
amended  after  the  most  bitter  opposition 
February  28,  1878.  All  on  the  same  day,  the 
bill  was  vetoed  by  the  President;  again 
passed  both  Houses  of  Congress,  thus  becom- 
ing the  law  of  the  land  February  28,  1878, 
notwithstanding  the  executive  veto. 

For  twelve  years  the  Bland  silver  law  con- 
tinued in  force.  During  all  these  years  the 
money  power  left  no  stone  unturned  to  make 
the  law  unpopular.  They  had  succeeded  in 
rendering  the  bill  less  beneficial  in  its  gen- 
eral effects  by  the  amendments  they  were 
able  to  make  while  the  bill  was  still  pending 
in  Congress,  but  the  baneful  effects  which 
they  had  tried  to  make  the  people  believe 


THE  CURSE  OF  THE  GIANTS  •  93 

would  result  if  the  bill  was  enacted  as  the 
law  of  the  land,  it  was  very  noticeable,  had 
not  been  realized.  On  the  contrary,  the  peo- 
ple realized  that  the  coinage  of  silver  into 
United  States  money  was  beneficial  to  trade 
and  commerce,  and,  as  expressed  in  "the 
panic  circular,"  it  was  very  evident  that 
"THEKE  WAS  AN  INCREASING  SEN- 
TIMENT IN  FAVOR  OF  GOVERNMENT 
LEGAL  TENDER  NOTES  AND  SILVER 
COINAGE." 

As  elsewhere  stated  the  Bland  law  was 
superseded  by  the  Sherman  law  in  1890. 
There  is  ground  for  honest  difference  of  opin- 
ion among  the  advocates  of  exclusive  United 
States  money  as  to  whether  or  not  the  Sher- 
man law  was  a  better  law  for  the  common 
people  than  the  law  of  1878.  But  the  crown- 
ing act  of  infamy  came  in  1893.  When  the 
Sherman  silver  law  had  been  in  force  barely 
three  years;  after  fifteen  years  of  compara- 
tive prosperity,  in  spite  of  all  efforts  to  prove 
that  silver  coinage  was  detrimental,  and  only 
detrimental,  that  it  would  bring  nothing  but 
adversity,  at  a  time  when  the  enemies  of  sil- 
ver were  obliged  to  admit  that  ''an  increas- 
ing sentiment"  favoring  the  coinage  of  more 
silver  prevailed,  then  loursuant  to  the  bank- 


94  THE  CURSE  OF  THE  GIANTS 

ers'  ''panic  circular,"  the  ''proclamation" 
was  issued  convening  Congress  in  extra  ses- 
sion for  the  sole  purpose  of  repealing  ' '  uncon- 
ditionally" the  Sherman  silver  bill.  And  not- 
withstanding the  heroic  efforts  of  the  honest 
representatives  of  the  people  in  both  Houses 
of  Congress,  the  bill  WAS  repealed  uncondi- 
tionally. 


THE  CURSE  OF  THE  GIANTS  95 


Appendix  A. 


ASTONISHING  FACTS  RELATING  TO 
RAILROAD  REPORTS. 

It  is  very  difficult  to  get  accurate  and  re- 
liable information  concerning  the  question  of 
profits  realized  from  railway  transportation. 
From  the  foregoing  pages  it  appears  that  re- 
ports of  railroads  are  quite  generally  ''noto- 
riously incorrect,  and  systematically  made  so 
in  many  cases,  for  the  purpose  of  concealing 
from  the  public  violations  of  law  and  want  of 
fidelity  to  official  trust."  ''Many  of  them 
are  made  with  consummate  skill  to  deceive 
both  the  people  and  the  stockholders,  while 
others  are  drawn  so  loosely  as  to  excite  only 
ridicule  and  disgust,"  and  officials  have  de- 
clared that  "no  reliance  whatever  can  be 
placed  upon  any  general  conclusions  as  to 
cost  and  profit  as  exhibited  by  these  reports." 

Discarding  therefore  all  conclusions  upon 
which  "no  reliance  whatever  can  be  placed," 
and  reasoning  only  from  well  authenticated 
facts,  further  study  into  this  practically  un- 
explored field  will  be  well  worth  while.    From 


96  THE  CURSE  OF  THE  GIANTS 

the  annual  report  of  the  New  York  Central 
and  Hudson  Kiver  Railroad  Company  for 
the  year  ending  June  30,  1906,  as  officially 
published  in  1907,  by  the  New  York  State 
Board  of  Railroad  Commissioners,  it  ap- 
pears the  total  income  of  the  company  from 
all  sources  whatsoever  was  $95,865,078.24, 
namely : 

From    freight    traffic     .• $53,551,121.63 

From   passenger    traffic    26,624,370.20 

From    transportation    of   U.    S.    mail 2,993,002.91 

From  express   traffic 3,018,164.48 

From   baggage   and   storage 265,784.83 

From     milk     65,973.30 

From    parcels     70,459.70 

From    newspapers    33,793.52 

From   rentals    2,260,811.05 

From    telegraph    service 15,565.45 

From    interest    1,485,796.73 

From    dividends     5,'220,104.95 

From  all  other  source.? 260,129.49 

$95,865,078.24 
Operating  expenses,    exclusive   of   taxes $63,580,165.71 

Gross   income   from   all   sources $32,284,912.53 

The  company  reports  that  during  the  year 
it  carried  1,523,579,759  passengers  a  distance 
of  one  mile,  and  8,542,831,756  tons  of  freight 
a  distance  of  one  mile.  Calculating  the  in- 
come of  freight  at  63  hundredths  of  a  cent  per 
ton  per  mile,  and  the  income  from  passen- 
gers at  two  cents  per  mile,  with  no  allow- 
ance for  the  extra  income  from  passen- 
gers riding  in  palace  cars,  the  total  in- 
come from  freight  and  passenger  traffic 
would  be  $84,291,435.24,  or  $4,115,943.41  more 


THE  CURSE  OF  THE  GIANTS  \)7 

than  the  income  as  appears  by  the  company's 
report.  On  the  excellent  and  level  tracks  of 
this  road,  3,000  tons  of  freight  can  be  moved 
a  distance  of  150  miles  in  60  freight  cars.  The 
cost  of  the  trip  for  wages  of  train  crew  and 
fuel  only  will  not  exceed  $50.  Five  hundred 
passengers  can  be  carried  from  New  York  to 
Albany  in  less  time  than  four  hours  at  a  cost 
not  exceeding  $45  for  fuel,  wages  of  train 
crew  and  all  other  necessary  trip  expenses, 
allowing  the  distance  to  be  150  miles.  At  the 
same  cost  per  ton  per  mile  and  the  same  cost 
per  jiassenger  per  mile,  all  the  freight  and 
all  the  passengers  carried  by  the  company 
during  the  entire  year  would  cost  the  com- 
pany $1,861,900  or  $4,354,710.59  less  than  the 
company  claims  to  have  paid  for  the  single 
item  of  fuel. 

The  repairs  of  track  all  told  is  reported  at 
nearly  $12,000,000  or  more  than  $3,300  for 
each  mile  of  track  covered  by  the  report. 
The  repairs  to  locomotives  average  above 
$2,550  for  each  locomotive,  some  of  which 
were  bought  new  during  the  year.  In  addi- 
tion to  this  generous  item  of  repairs  the  com- 
pany claims  to  have  paid  to  engine  and  round- 
house men  the  enormous  sum  of  $5,882,688.93. 
According  to  the  report  of  the  same  company 


98  THE  CURSE  OF  THE  GIANTS 

to  the  State  of  Pennsylvania  for  the  same 
period  of  time  as  appears  by  the  official  re- 
port of  the  Secretary  of  Internal  Affairs  of 
that  state,  the  number  of  employes  for  the 
year  was  54,723  and  the  wages  paid  $37,996,- 
114.  This  is  5,468  more  men  and  $4,007,594 
more  wages  paid  than  the  same  company  re- 
ports to  the  New  York  state  officials,  for  the 
same  year,  the  year  ending  June  30,  1906,  and 
the  lesser  amount,  the  wages  claimed  to  have 
been  paid  according  to  the  report  to  the  New 
York  authorities,  namely,  $33,998,520.69  is 
$7,364,150.49  more  money  than  the  company 
reports  as  its  entire  income  from  its  passen- 
ger traffic  during  the  year.  Considering  the 
foregoing  facts,  further  inquiry  is  at  least 
permissible.  The  company  reports  8,500,000,- 
000  of  tons  of  freight  moved  a  distance  of 
one  mile.  The  Pennsylvania  Eailroad  Com- 
pany reports  more  than  double  that  number 
of  tons  carried  a  distance  of  one  mile  on  their 
tracks  east  of  Pittsburg,  namely,  17,853,455,- 
006  tons. 

No  person  of  ordinary  intelligence  riding 
over  the  Central  lines  from  New  York  to  Buf- 
falo can  fail  to  be  most  profoundly  impressed 
by  the  sight  of  ponderous  freight  trains  mov- 
ing in  every  direction,  north,  south,  east  and 


THE  CURSE  OF  THE  GIANTS        99 

west.  An  ofBcial  time  table  issued  by  the 
Central  road,  states  that  ''there  are  on  an 
average  400  regular  passenger  trains  arriv- 
ing at  and  departing  from  the  Grand  Central 
depot  each  business  day  of  the  year;  fifteen 
trains  to  Buffalo  and  fourteen  to  Niagara 
Falls.**  ''Over  these  tracks  pass  a  large 
share  of  the  enormous  traffic  to  and  from  the 
great  commercial  ports  of  New  York  and 
Boston." 

*'The  ponderous  locomotives  haul  over  a 
large  portion  of  this  system  from  80  to  100 
loaded  cars  to  the  train;  many  of  these  cars 
will  hold  1,000  bushels  of  grain  or  110,000 
pounds  (55  tons),  of  coal  each,  or  60,000 
pounds  of  merchandise.  During  the  busy  sea- 
son THERE  ARE  SEVERAL  HUNDRED 
FREIGHT  TRAINS  PER  DAY  PASSING 
OVER  THESE  TRACKS,  forming  an  end- 
less chain  of  traffic  between  the  great  com- 
mercial and  industrial  and  agricultural  cen- 
ters of  the  west  and  New  York  city  and  Bos- 
ton." 

"An  average  of  100  trains  per  day,  each 
train  composed  of  80  cars,  and  each  car  load- 
ed 50  tons  to  the  car,  will  haul  in  one  year  six 
billion  tons  more  than  reported  by  the  Cen- 


100  THE  CURSE  OF  THE  GIANTS 

tral  road,  namely  14,600,000,000  tons,  a  dis- 
tance of  one  mile. 

''The  Central  reports  that  it  costs  the  com- 
pany for  'water  supply  for  locomotives'  dur- 
ing the  year  $383,440.40  or  considerably  more 
than  $1,000  per  day,  Sundays  and  holidays  in- 
cluded. Considering  the  enormous  quantity 
of  water  that  can  be  purchased  for  more  than 
one-third  of  a  million  dollars,  people  of  an 
enciuiring  turn  of  mind  can  hardly  help  won- 
dering whether  the  company  did  not  pay  too 
much,  or  whether  a  lesser  quantity  would  not 
have  answered  all  purposes. 

"The  cost  for  'oil,  tallow  and  waste  for  lo- 
comotives' is  reported  at  nearly  $800  per  day, 
$289,001.43  for  the  year.  'Other  supplies  for 
locomotives'  are  reported  amounting  to 
.$388.82  per  day,  $123,669.75  for  the  year." 
"Stationery  and  printing"  is  said  to  have 
cost  more  than  $1,200  per  day,  nearly  half 
a  million  ($440,055.02)  for  the  year.  The 
"other  expenses"  amount  to  the  insignificant 
or  significant,  sum  of  $2,679.09  per  day,  or 
nearly  a  million  ($977,867.84)  for  the  year. 

If,  as  reported,  the  amount  paid  in  salaries 
and  wages  was  $33,988,520.69,  the  amount 
might  have  been  divided  among  the  officers 
and  emi3loyes  as  follows : 


THE  CURSE  OF  THE  GIANTS  101 


25  officers,  each    $200,000    or    four    times    the 

salary  of    the    President    of    the    United 

States     $   5,000,000 

20  others,   $10,000  each     200,000 

50   others,        5,000       "        250,000 

100   others,       3,000       "        300,000 

300   others.        2,000       "         600,000 

1000   others,        1,500       "        1,500,000 

1000   others,        1,200       "         1,200,000 

1000   others,        1,000      "        1,000,000 

1000   others,           800       "        800,000 

5000   others,           600      "        3,000,000 

39770  others,         480       "         19,089,600 

Amount   saved   for    benefit   of  stock-holders....  1,048,920 


$33,988,520 


For  operating  its  lines  east  of  Pittsburg 
only,  tlie  Pennsylvania  Railroad  reports  as 
having  paid  in  salaries  and  wages  during  the 
year  ending  June  30,  1906,  more  than  70  mil- 
lions of  dollars  ($70,562,324).  It  reports  its 
entire  income  from  passenger  traffic  over  all 
lines  east  of  Pittsburg  to  be  $28,176,777. 

Excess  of  tvages  reported  paid  over  the 
entire  income  from  passenger  traffic,  forty- 
two  millions,  three  hundred  and  eighty-five 
thousand,  five  hundred  and  forty-five  dollars. 

It  reports  the  number  of  persons  employed 
as  103,796,  which  is  2,643  persons  for  each 
hundred  miles  of  its  lines  or  about  twice  the 
number  employed  by  the  New  York  Central 
and  Hudson  River  Railroad  Company  for 
each  hundred  miles  of  track  and  more  than 
four  times  the  number  employed  for  each 
hundred  miles  of  track  on  all  lines  of  the 
United  States,  according  to  the  statistical  re- 


102  THE  CURSE  OF  THE  GIANTS 

port  of  tlie  Inter  State  Commerce  Commis- 
sion for  the  year  ending  June  30,  1905.  , 
Allowing  every  person  on  the  payroll  a  full 
ye:ir's  salary  the  number  of  employes  might 
have  been  paid  as  follows  with  a  saving  of 
$4,961,324  for  the  stock-holders. 

20  officers  $200,000  each     $   4,000,000 

--        ■                ■  -- 2,000,000 

1,000,000 

200,000 

500,000 

600,000 

1,200,000 

2,250,000 

1,800,000 

1,500,000 

4,000,000 

4,800,000 

20,000,000 

21,751,000 


20 

others, 

100.000   " 

20 

others, 

50,000   " 

20 

others, 

10,000   " 

100 

others, 

5,000   " 

200 

others, 

3,000   " 

600 

others, 

2,000   " 

1500 

others. 

1,500   " 

1500 

others. 

1,200   " 

1500 

others. 

1,000   " 

5000 

others, 

800   " 

8000 

others, 

600   " 

40000 

otliers. 

500   ' 

45316 

others, 

480   " 

Saved 

for  stock-he 

103,796  $70,562,324 

EEDUCE  THE  PASSENGER  FARE. 

Can  railway  companies  carry  passengers 
at  a  rate  of  one  cent  a  mile  with  a  fair  margin 
of  profit?  AYlien  railway  officials  affirm  that 
a  rate  of  two  cents  is  unremunerative,  why 
should  the  affirmation  be  doubted  1 

During  all  the  history  of  steam  railway 
transportation  in  America,  covering  a  period 
of  three-quarters  of  a  century,  no  data  has 
been  established,  or  at  least  made  accessible 
to  the  public,  from  which  accurate  conclu- 
sions may  be  deducted. 

So  long  ago  as  1855,  it  was  reported  to  the 


THE  CURSE  OF  THE  GIANTS  103 

New  York  legislature  concerning  the  official 
reports  of  steam  railway  transportation  com- 
panies, that  "no  reliance  whatever  can  be 
placed  upon  any  general  conclusions  as  to 
cost  and  profit  of  railway  transportation 
as  exhibited  by  these  reports."  On  the  same 
occasion  it  was  further  reported  that  official 
railway  reports  were  frequently  "notorious- 
ly incorrect  and  in  many  cases  systematically 
made  so  for  the  purpose  of  concealing  from 
the  public  violations  of  law  and  want  of 
fidelity  to  their  trusts." 

See  Senate  document,  number  35,  N.  Y., 
1855. 

Twenty-eight  years  later,  1883,  the  same 
body  was  informed  that  "many  of  these  re- 
ports (the  official  reports  of  railway  offi- 
cials) are  made  with  consummate  skill  to  de- 
ceive both  the  stockholders  and  the  people, 
while  others  are  so  loosely  drawn  as  to  ex- 
cite only  ridicule  and  disgust."  See  annual 
report  of  Eailroad  Commissioners  of  the 
State  of  New  York,  1883. 

The  first  annual  report  of  the  New  York 
Public  Service  Commission,  1908,  states  on 
page  37,  that  "the  railroads  themselves  have 
no  settled  principles  derived  from  the  con- 
sideration of  legitimate  facts  upon  which  pas- 


104  THE  CURSE  OF  THE  GIANTS 

senger  rates  should  be  determined.  Ap- 
parently tlie  method  of  fixing  fares  generally 
adopted  by  them  is  mainly  arbitrary." 

It  is  safe  to  say  that  no  person  living  will 
attempt  to  demonstrate  by  incontrovertible 
facts  and  figures  just  what  passenger  rates 
may  be  necessary  to  pay,  say  ten  per  cent,  on 
the  capital  actually  invested  or  the  capital 
necessary  to  construct  and  equip  a  first  class 
modern  double  track  railway.  Reasoning, 
however,  from  well  established  data,  it  seems 
more  than  probable  that  a  rate  of  less  than 
two  cents  a  mile  for  passenger  traffic  must 
be  as  remunerative  to  say  the  least  as  the 
minimum  rates  charged  for  moving  freight, 
namely,  a  rate  as  low  and  sometimes  lower 
than  three-tenths  of  a  cent  per  ton  per  mile. 

For  instance :  a  train  of  fifty  freight  cars 
making  a  trip  from  Milwaukee  to  New  York, 
each  car  loaded  with  twenty  tons  of  grain  or 
grain  products,  1,000  tons,  at  a  rate  of  less 
than  three-tenths  of  a  cent  per  ton  per  mile 
(2.95  mills  per  ton  per  mile)  will  earn  $3,140. 
A  train  of  eight  ordinary  passenger  coaches 
and  two  baggage  cars  will  comfortably  carry 
360  passengers  weighing,  baggage  included, 
50  tons  and  making  the  same  trip  running 
over  the  same  tracks  from  Milwaukee  to  New 


THE  CURSE  OF  THE  GIANTS  105 

York,  will  earn  $3,834  at  a  rate  of  only  one 
cent  a  mile.  The  eight  passenger  coaches  rep- 
resent an  investment  of  about  $8,000  more 
than  the  value  of  the  50  freight  cars.  Making 
proper  allowance  for  this  difference  of  invest- 
ment and  also  the  difference  in  the  cost  of  fuel 
for  moving  1,000  tons  of  freight,  the  earnings 
of  the  eight  passenger  coaches  at  one  cent  per 
passenger  per  mile,  exceed  the  earnings  of  the 
fifty  freight  cars  at  the  minimum  rate,  by 
fully  $700. 

According  to  the  annual  report  of  the  New 
York  Central  and  Hudson  River  Eailroad 
Company  for  the  year  ending  June  30,  1906, 
the  entire  passenger  mileage  of  that  company 
for  the  year  was  equal  to  15,235,798  pas- 
sengers, carried  an  average  distance  of  100 
miles  each.  Had  that  company  received  from 
each  passenger  precisely  two  cents  for  each 
mile  traveled,  no  more  and  no  less,  their  total 
incomefrom  passenger  traffic  would  have  been 
$30,471,596,  or  just  $3,847,225.80  more  than 
the  company  claims  to  have  received  as  its 
total  income  from  passenger  traffic.  It  ap- 
pears, therefore,  that  the  published  report 
needs  to  be  revised,  corrected  and  explained 
or  otherwise  that  company  actually  does 
carry  passengers  for  a  decimal  less  than  one 


106  THE  CURSE  OF  THE  GIANTS 

and  three-fourtlis  cents  per  passenger  per 
mile. 

Had  the  rate  per  ton  per  mile  wliicli  the 
company  received  from  its  passenger  traffic 
been  the  same  as  the  rate  charged  for  mov- 
ing grain  or  the  products  of  grain  from 
Milwaukee  to  New  York,  namely,  $3.14  a  ton 
for  a  distance  of  1,065  miles,  their  income 
from  passenger  traffic  would  have  been 
$561,820.13,  allowing  the  weight  of  each  pas- 
senger to  average  250  pounds,  including  bag- 
gage. It  cannot  be  argued  that  passengers 
should  be  carried  at  the  same  rate  per  ton 
per  mile  that  is  charged  for  moving  freight, 
for  very  obvious  reasons,  yet,  nevertheless, 
it  will  be  hard  to  convince  people  of  a  log- 
ical turn  of  mind  that  it  is  necessary  to 
charge  a  passenger  weighing  only  100  pounds 
$21.70  (or  $27.05  if  the  passenger  rides  in  a 
palace  car)  for  riding  the  same  distance  that 
100  pounds  of  flour  is  carried  for  a  fraction 
less  than  sixteen  cents. 

Assuming  that  each  passenger  had  paid 
only  one  cent  for  each  mile  traveled,  the  in- 
come from  15,235,798  passengers  riding  100 
miles  each  ($1  a  passenger)  would  be  exact- 
ly $15,235,798.  Leaving  entirely  out  of  con- 
sideration for  the  present  all  income  from 


THE  CURSE  OF  THE  GIANTS  107 

freight  traffic  and  considering  only  such 
trackage,  buildings  and  equipment  as  appears 
to  be  necessary  to  carry  about  46,000  pas- 
sengers a  day,  from  the  meager  data  acces- 
sible to  the  public  it  will  be  interesting  and 
profitable  to  find  whether  the  company  would 
make  or  lose  by  its  passenger  traffic  only, 
charging  passengers  at  the  rate  of  not  more 
than  one  cent  a  mile. 

Trains  of  eight  coaches  each  leaving  op- 
posite directions,  opposite  points  100  miles 
distant,  every  20  minutes,  each  train  carrying 
320  passengers,  will  carry  16,819,200  pas- 
sengers a  distance  of  100  miles  each  during 
the  year,  and  the  revenue  or  earnings  at  one 
cent  a  mile  would  be  just  $16,819,200.  A 
train  of  eight  passenger  coaches  will  carry 
320  passengers  comfortably.  The  trip  ex- 
pense or  cost  of  moving  a  train  of  eight  pas- 
senger coaches  a  distance  of  100  miles,  in- 
cluding only  fuel,  cost  of  tickets,  wages  of 
train  crew  and  all  other  necessary  trip  ex- 
penses, will  not  exceed  $40.  It  appears, 
therefore,  that  the  combined  cost  of  fuel, 
printing  tickets  and  wages  of  trainmen  dur- 
ing the  year  will  not  exceed  $2,102,400.  Al- 
lowing each  train  of  eight  passenger  coaches 
to  make  an  average  of  four  100-mile  trips 


108  THE  CURSE  OF  THE  GIANTS 

each  24  hours,  we  find  it  necessary  to  keep 
in  constant  operation  not  less  than  324 
coaches  and  baggage  cars  and  36  locomo- 
tives. Allowing,  also,  for  a  safe  margin  for 
contingencies,  an  equipment  of  say  400 
coaches  and  75  locomotives  would  seem  to 
be  ample. 

Considering  all  other  expenses,  together 
with  the  total  trip  expenses  for  the  year,  the 
result  may  be  estimated  about  as  follows: 

Repairs   of  engines   and   cars,   including  wages 

of   men   employed   in   round  houses $  300,000 

Repairs   of   track 200,000 

Repairs    to     buildings 30,000 

Injuries  to  persons 900,000 

Supplies  for  engines,   oil,  water,  waste  and  all 

other    supplies    60,000 

Fuel   and  lights  for  depots 6,000 

Fuel,   tickets,   wages   of  train  crews   and  other 

expenses    as    above   calculated 2,102,400 

Wages   of   clerks   and   ticket   sellers 108,000 

Wages   of  track  walkers  and  switchmen 150,000 

Salaries   of   officers    250,000 

All    other   expenses   say,    $1,000   per   day 365,000 

$  4,471,400 
Add    20%    for    possible    contingencies 894,280 

Total    operating    expenses $  5,365,680 

Kxcess  of  income   over  operating  expenses. ..  .$11,453,520 

Total    income     $16,819,200 

It  appears  then,  according  to  the  above  es- 
timate, that  the  margin  of  earnings  from  car- 
rying passengers  at  a  rate  of  one  cent  a  mile, 
over  and  above  operating  expenses,  is  more 
than  16%  on  a  capital  of  $70,000,000,  or  suf- 
ficient to  pay  a  dividend  of  15%  on  that 
amount  of  capital  and  to  carry  over  a  sur- 


THE  CURSE  OF  THE  GIANTS  109 

plus  of  undivided  profits  of  nearly  a  million 
of  dollars.  This  estimate  of  operating  ex- 
penses might  be  quite  materially  reduced  if 
the  item  of  expenses  for  salaries  of  officers, 
and  possibly  some  other  items,  is  equally 
chargeable  to  both  freight  and  passenger  traf- 
fic. 

It  is  not  claimed  that  the  above  expense 
items  are  anything  more  or  less  than  esti- 
mates. They  are  estimates  made  however  by 
a  capable  statistician  who  realizes  that  they 
will  be  captiously  criticized,  or,  as  Mr.  Law- 
son  says,  ''pawed  over"  by  the  system,  and 
all  that  concourse  of  people  who  have  noth- 
ing but  contempt  for  those  who  blaze  the  way 
for  a  more  perfect  and  equitable  economic 
order  of  public  affairs. 

Some  of  the  items  will  not  admit  of  any  ma- 
terial increase,  and  some  of  them,  no  doubt, 
if  the  actual  figures  could  be  established,  will 
be  found  overestimates  rather  than  underes- 
timates. In  the  absence  of  any  official  data 
however  upon  which  any  "reliance  whatever 
can  be  placed,". the  estimated  result  may  be 
taken  as  a  basis  of  calculation  for  more  scien- 
tific research,  and,  peradventure,  if  the  total 
estimate  of  operating  expenses  might  be 
slightly  increased  (an  unlikely  contingency), 


110  THE  CURSE  OF  THE  GIANTS 

it  may  be  pointed  out  that  at  least  a  reason- 
able return  on  capital  actually  invested  would 
be  realized  if  the  actual  expenses  were  found 
to  he  double  the  estimated  exjDenses. 

The  largest  item  in  the  estimate  of  ex- 
penses next  to  wages  and  fuel,  namely,  $900,- 
000,  for  injuries  to  persons,  is  $6,785.51  more 
than  the  actual  aggregate  expenditure  for  in- 
juries reported  by  the  New  York  Central  and 
Hudson  River  Railroad  Company  for  the  year 
ending  June  30, 1906.  If  it  should  be  claimed 
that  the  sum  of  $250,000  for  salaries  of  of- 
ficers, an  average  of  $10,000  per  year  for  25 
persons  is  not  a  reasonable  allowance,  it  is 
answered  that  more  capable  management 
could  be  obtained  for  less  money.  Every  in- 
dividual of  the  25  or  more  officers  and  di- 
rectors of  the  New  York  Central  and  Hudson 
River  Railroad  Company  is  an  officer  or  di- 
rector in  from  20  to  40  different  corporations 
or  financial  institutions,  and  one  of  them 
draws  a  salary  of  $8,000  per  annum  for  a 
very  few  days'  service  as  a  Senator  of  the 
United  States.  Probably  not  one  of  them  de- 
votes his  energies  exclusively  to  the  railway 
businessi  "Absentee  management"  is  an 
evil  that  stockholders  of  this  corporation  have 
frequent  cause  to  complain  of.    It  has  been 


THE  CURSE  OF  THE  GIANTS  111 

said  that  '^the  Central  system"  is  "directed 
from  steam  yachts  in  the  Mediterranean,  and 
the  race  courses  of  Great  Britain  and  the  con- 
tinent. '  * 

Is  seventy  million  dollars  a  sufficient 
amount  of  capital  to  construct  300  miles  of 
first  class  modern  double  track  railway  with 
buildings,  properly  equipped  to  carry  46,000 
passengers  daily?  The  New  York  Central 
and  Hudson  River  Railroad  Company  reports 
the  ''grand  total  cost  of  road  and  equipment" 
of  that  road  up  to  June  30,  1906,  to  be 
$248,446.51  per  mile  of  road.  It  may  be 
safely  concluded  that  the  actual  necessary 
cost  is  less  rather  than  more  than  the  sum 
reported.  Included  in  this  grand  total  with- 
out question  are  many  extravagant,  not  to  say 
useless,  expenditures.  The  cost  of  the  equip- 
ment necessary  to  move  hundreds  of  thou- 
sands of  tons  of  freight  daily;  hundreds  of 
locomotives  and  scores  of  thousands  of 
freight  cars  are  also  included.  Seventy, 
millions  of  dollars  for  300  miles  averages 
only  about  $15,000  per  mile  less  than  the 
grand  total  of  roadway  buildings  and  equip- 
ment claimed  to  have  been  expended  by  the 
Central  system  and  is  doubtless  ample  cap- 
ital to  construct  300  miles  of  double  track 


112  THE  CURSE  OF  THE  GIANTS 

roadway  with  the  necessary  stations  and 
abundantly  equip  the  same  with  all  the  roll- 
ing stock  necessary  to  carry  46,000  passen- 
gers every  day  in  the  year. 

It  may  be  observed  that  the  above  method 
of  calculation  considers  a  road  300  miles  in 
length  with  the  traffic  assumed  to  be  concen- 
trated on  a  tra<?kage  of  100  miles.  This 
method  was  adopted  for  the  purpose  of  tak- 
ing a  simple  and  easily  comprehended  proc- 
ess of  calculation.  Moreover,  it  serves  to  call 
attention  to  the  fact  that  all  the  travel  night 
and  day  over  the  principle  lines  in  the  most 
populous  section  of  the  United  States,  in- 
cluding all  the  trains  to  and  from  New  York 
City,  over  the  tracks  of  the  Central  and  Hud- 
son River  Road,  commutation  and  otherwise, 
the  West  Shore,  the  New  York  and  Harlem; 
all  trains  to  and  from  Albany  and  Troy,  Buf- 
falo, Rochester  and  all  the  other  great  cities 
along  the  Central-Hudson  River  lines,  all 
trains  on  the  Rome,  Watertown  and  Ogdens- 
burg  and  all  trains  to  and  from  Boston  over 
the  Boston  and  Albany  Road;  some  20  odd 
roads  all  told,  with  trains  running  every  hour, 
night  and  day,  is  reported  to  be  not  more 
than  could  be  carried  in  ordinary  trains  of 
eight  passenger  coaches  on  a  line  not  more 


THE  CURSE  OF  THE  GIANTS  113 

than  100  miles  in  length ;  not  one  of  the  cars 
filled  to  its  full  capacity,  and  not  less  than 
20  full  minutes  elapsing  between  the  depart- 
ure of  each  train. 

In  still  more  general  and  comprehensive 
language  the  argument  might  be  summed  up 
in  these  words : 

On  a  track  not  more  than  300  miles  in 
length  an  average  of  46,000  passengers  per 
day,  traveling  an  average  distance  of  100 
miles  each,  will  yield  a  yearly  earning  of 
$16,819,200,  at  a  rate  of  only  one  cent  a  mile. 
If  the  operating  expenses,  including  all  re- 
pairs, damages  to  persons  and  salaries  of 
officers,  does  not  exceed  ten  million  dollars 
during  the  year,  the  margin  of  revenue  is 
sufficient  to  pay  six  per  cent  on  a  capitaliza- 
tion of  seventy  million  dollars  and  still  leave 
a  surplus  of  more  than  two  and  one-half 
million  dollars  from  which  to  pay  taxes  and 
accumulate  undivided  profits. 


114  THE  CURSE  OF  THE  GIANTS 


Appendix  B. 


SENATORS  AND  REPRESENTATIVES 
IN  CONGRESS  WHO  VOTED  AGAINST 
THE  REPEAL  OF  THE  SHERMAN 
SILVER  BILL 

SEJVATORS.      (Vote    taken    October    30th,    1893.) 

William  V.    Allen,   Madison,   Nebraska. 
■William    B.    Bate,    Nashville,    Tennessee. 
James    H.    Berry,    Bentonville,    Arkansas. 
Joseph  C.   S.  Blackburn,  Versailles,  Kentucky. 
Matthew  C.  Butler,   Edgefield,  S.   C. 
Wilkinson    Call,    Jacksonville,    P'lorida. 
J.    Donald    Cameron,    Harrisburg,    Pa. 
Francs   M.    Cockrell,    Warrensburg-,    Mo. 
Richard   Coke,   Waco,    Texas. 
John  W.    Daniel,   Lynchburg,   Virginia. 
Fred    T.    Dubois,    Blackfoot,    Idaho. 
James  Z.   George,   Carrollton,   Miss. 
Isham   G.    Harris,   Memphis,   Tenn. 
John   I,.   M.   Irby,   Laurens,   S.   C. 
James   K.   Jones,   Washington,   Ark. 
John   P.   Jones,   Gold  Hill,   Nevada. 
James  H.  Kyle,  Aberdeen,  So.  Dak. 
John    Martin,   Topeka,   Kansas. 
Samuel   Pasco,  Monticello,   Florida. 
William  Alfred   PefCer,   Topeka.    Kas. 
George  C.   Perkins,   Oakland,   Cal. 
Richard  F.   Pettigrew,   Sioux  Falls,   So.   Dak. 
Thomas    C.    Power.    Helena,    Montana. 
James  L.   Pugh,   Eufaula,  Alabama. 
William  N.  Roach,  Larrimore,  North  Dakota. 
George   L.    Shoup,    Salmon    City,    Idaho. 
William   M.   Stewart,   Carson   City,   Nevada. 
Henry   M.   Teller,   Central    City.    Colorado. 
Zebulon  B.  Vance,  Charlotte,  North  Carolina. 
George    Graham    Vest,    Kansas    City,    Mo. 
Edward   C.    Walthall,    Grenada,    Miss. 
Edward  O.  Wolcott,  Denver,  Colorado. 

REPRESBNTATIVRS.      (Vote   tHken    Augniat    28tb,    1893.) 

Jo   Abbott,   Hillsboro,    Texas. 
David    D.    Aitken,    Flint,    Michigan. 
Sydenham   B.  Alexander,  Charlotte,  N.  C. 
John    M.    Allen,    Tupelo,    Miss. 
Marshall   Arnold,    Benton,   Mo. 
Joseph   W.   Bailey,  Gainsville,  Texas. 


THE  CURSE  OF  THE  GIANTS  115 

William   Baker.   Lincoln,   Kansas. 

?.?1„   ,      •  T?^?.**^,^;^^'^'    Fayette,  Alabama. 
Charles  K.   Bell,   Fort  Worth,  Texas 

John   C.    Bell,   Montrose,    Colorado 

Newton   C.   Blanchard,   Shreveport,  La 

Richard   P.   Bland,  Lebanon,  Mo. 

Ha  dor  E.  Boen.  Fergus  Falls,  Minn. 

William  H.   Bower,  Lenoir    N    C 

William  W.   Bowers,   San   Diego,"  Cal 

William  A.   B.    Branch,   V/ashington.  N    C 

Case    Broderick,    Holton.    Kansas. 

William   Jennings   Bryan,    Lincoln,    Nebraska. 

Daniel    D.    Burnes,    St.    Joseph,   Mo  "■=»■''". 

Anthony   Caminetti,   Jackson,    Cal 

Joseph   G    Cannon,  Danville,  Illinola. 

Champ  Clark,  Bowling  Green,  Mo 

James   E.   Cobb,    Tuskegee,   Alabama 

Henry  A.  Coffeen,  Sheridan,   Wyoming. 

S.   B.   Cooper,   Woodville,  Texas 

Nicholas  N.  Cox,  Franklin,  Tenn. 

William  T    Crawford,  Waynesvllle,  N.  C. 

David  B.  Culberson,  Jefferson,  Texas 

Charles   Curtis,    Topeka.   Kansas. 

John  Davis,  Junction  City,  Kas 

gayW   A.   De  Armond,   Butler,   Mo. 

Williarn   H    Denson,   Gadsden,  Alabama 

Hugh  A.  Dinsmore,  Fayetteville,  Ark. 

Alexander  M.    Dockery,   Gallatin,    Mo. 

William   R.    Ellis,   Heppner,   Oregon 

William   T.   Ellis,   Owensboro,   Ky 

Benjamin  A.   Enio,  Jackson,  Tenn. 

James  F.  Epes,  Blackston,  Va 
George  W.  Fithian,  Newton,  111 

Edward  H.   Funston,   lola,  Kansas. 

Robert    W.    Ryan,    Marshfleld,    Mo 

Isaac   H.    Goodnight,    B'ranklln,    Ky 

Benjamin   F.   Grady,   Wallace,  N.  C. 

A.  L.   Hager,  Greenfield,  Iowa. 

Eugene  J.   Hainer,  Aurora,  Nebraska. 

Osee   Matson   Hall,   Red   Wing    Mo 

William   A.    Harris,    Linwood,    Kas' 

Charles  S.  Hartman,  Bozeman,  Montana. 

William  H.  Hatch,  Hannibal,  Mo 

John   T,   Heard,  Sedalia.   Mo. 

John   S.   Henderson,   Salisbury,   N    C 

William  P    Hepburn,  Clarinda,  Iowa 

Benjamin   Herman,   Roseburg.   Oregon 

Samuel   G.   Hilborn,   Oakland,    Cal 

Charles  E.  Hooker,  .Jackson,  Miss 

Albert  C    Hopkins,   Lock  Haven,  Pa. 

T.   J.   Hudson,   Fredonia,   Kas. 

Joseph   C.   Hutcheson,   Houston,   Texas 

George    P    Ikert,    East    Liverpool,   Ohio. 

William  A.  Jones,    Warsaw,   Va 

Omer  M.    Kem,   Broken   Bow,   Nebraska 

Constantine  B.  Kilgore,   Wells  Point,   Texas 

John  C.  Kyle,  Sardis,  Miss. 

Edward   Lane,   Hillsboro,    111 

Asbury  C.  Latimer,  Belton    S    C 

Leonldas   F.   Livingston,   Kings,'  Georgia. 


116  THE  CURSE  OF  THE  GIANTS 

Eugene   F.   Loud,    San   Francisco,    Cal. 
William  V.    Lucas,   Hot   Springs,   So.   Dak. 
John  W.   Maddox,    Rome,   Ga. 
James   G.    Maguire,   San   Francisco,  Cal. 
Stephen   R.   Mallory,    Pensacola,   Fla. 
Benjamin    F.   Marsli,    Warsaw,   111 . 
Phillip    D.    McCulloch,    Jr.,    Marianna,    Ark. 
James   C.   McDearmon,   Trenton,    Tenn. 
John  L.  McLaurin,  Bennettville,  S.  C. 
Thomas   C.   McRea,   Prescott,   Ark. 
William  A.  McKeighan,   Red  Cloud,   Neb. 
George    D.    Meiklejohn,    Fullerton,    Neb. 
Hermando    D.    Money,    Carrollton,    Miss. 
Charles  H.  Morgan,  Lamar,  Mo. 
Charles  L.  Moses,   Turin,  Ga. 
George  W.   Murray,   Sumpter,   S.  C. 
Robert    Neill,    Batesville,    Ark. 
Francis  G.  Newlands,   Reno,  Nevada. 
Lafe  Pence,   Denver,   Colorado. 
John  A.   Picklor,   Faulkton,   So.   Dak. 
James  D.   Richardson,   Murfreesboro,   Tenn. 
Gaston   A.    Robbins,   Selma,   Alabama. 
Samuel    M.    Robertson,    Baton    Rouge,   La. 
Joseph  D.  Sayers,  Bastrop,  Texas. 
Joseph    C.   Sibley,    Franklin,    Pa. 
Jerrv   Simpson,   Medicine   Lodge,    Kas. 
George  W.   Smith,   Murphysboro,   111. 
Henrv  C.  Snodgrass,   Sparta,   Tenn. 
Jesse'  F.   Stallings.   Greenville.  Alabama. 
Thomas    P.    Stockdale,    Summit,    Miss. 
Thomas    J.    Strait,    Lancaster,    S.    C. 
Willis   Sweet,   Moscow,    Idaho. 
John  C.   Tarnsney,   Kansas  City,  Mo. 
Farnish    C.    Tate,    Jasper,    Georgia. 
Alfred   A.   Tavlor,   Johnson  City,   Tenn. 
William    L.    Terry,    Little   Rock,   Ark. 
Joseph   Wheeler,   Wheeler,   Alabama. 
James   R.   Williams,   Carmi,    111. 
John  S.  Williams,  Yazoo  City,  Miss. 
John   L.   Wilson,   Spokane,   Washington. 
Fred  A.   Woodard,   Wilson,  N.  C. 


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